Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.

Tuesday 01.31.2012

The Upcoming Hyper-inflationary Great Depression
By David Schectman - SilverBearCafe.clom
On Friday morning I had a long conversation with my friend, Jim Cook. I went to work for Jim in 1983 at Investment Rarities and we quickly developed a friendship apart from work. Jim is a well-learned man, a true Libertarian and a student of Ludwig von Mises. During our conversation, for the first time ever, he told me that he was afraid things had gone beyond the point where they could be fixed, beyond the point of no return.
I have maintained for the last year that the problems could no longer be fixed, that it was a mathematical certainty that were on the path toward the destruction of the dollar and the most likely course of events would be a hyper-inflationary Great Depression.

What Made Gold Break Out?
By: Julian D. W. Phillips - GoldSeek.com
Last week, gold broke through heavy overhead resistance, as did silver, to look very positive for the days ahead. Many technical analysts didn’t feel that gold had that kind of momentum but then came the break. It wasn’t a struggling break; it was robust sweeping resistance aside as though it wasn’t even there.
You’re probably saying now that it was the announcement from the Fed that interest rates would be held at current levels for another year more, through to the end of 2014. The superficial assumption is that this means that the dollar will earn nothing, so risk assets should outperform dollar deposits. That’s true, but a great deal more was implied in their statement (as we detailed in the latest issues of the Gold Forecaster & Silver Forecaster). The Fed pointed to long rates rising to above 4% over time, while inflation remained at 2% –and could fall further. Why?

Gold Is The Hottest Currency In The World
By Robert Lenzner, Forbes Staff
The price of gold is roaring back from its latest temporary correction, sending the bears into full withdrawal. If you sold your gold in December as it fell to $1525 an ounce, you’re probably feeling foolish at the incredible $210 rise to $1735– a 15% move in no time at all.
Gold, you see, is not a commodity like oil and copper and wheat. It is rather an alternative currency– one that finds buyers when paper currencies like the Euro are being hugely increased in supply by the ECB to forestall a sovereign cum bank crisis in Europe. There’s $650 billion in European bank and sovereign debt coming die before March 31, 2012 which can be sopped up by the $650 billion gift from ECB to the banks at the bargain rate of 1%. And more available from the European central bank– Europe’s very own Quantitative Easing program.

Silver and Gold will win the currency wars
By Greg Canavan
On Wednesday, Federal Reserve boss Ben Bernanke promised speculators he would keep interest rates low until 2014:
'To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions – including low rates of resource utilization and a subdued outlook for inflation over the medium run – are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.'

Behold the central banks gold holding
By Adrian Ash - CommodityOnline.com
Yes, central banks are holding more gold. But they're holding very much more wood-pulp on top.
The Gold price on Wednesday broke up through the downtrend starting at last summer's record high. Or so a technical analyst studying the price chart would tell you.
But just as in late 2007 - from where gold began a 55% run inside 6 months - this week the price of gold bullion jumped on news that is fundamental: the price of money, specifically Dollars, the world's #1 currency for trade and central-bank reserves.

Failed Fed Policies Prolong the Agony
By: Dr. Ron Paul, U.S. Congressman - GoldSeek.com
The Federal Reserve's interest rate price-setting board, the FOMC, met last week. They will continue to set the federal funds rate at well below 1%, and plan to keep it low until the end of 2014. That's a year and half longer than they planned when they met just last month. Chairman Bernanke says they are keeping interest rates so low for so long because the economic outlook warrants it.

Silver looks more bullish than gold in near term: Deutsche Bank
LONDON (Commodity Online): Silver prices could outperform Gold in the near-term but in longer-term the persistence of negative real interest rates will sustain the appeal of holding precious metals, said Deutsche Bank in a research note. Fed announcement resulted in a strong positive move in the silver price.
According to Deutsche Bank, precious metals advanced as the Fed statement led to a weak USD against the Euro. Bank believes that renewed USD weakness could be exacerbated near-term by an unwinding of Euro-short positions and this, in addition to a moderation in deflationary or growth fears, could underpin a further rise in gold prices.

The Coming Paradigm Shift in Silver
By Steve St. Angelo - SilverSeek.com
The biggest problem for investors today in trying to forecast the future price of silver is the enormous amount of contradictory analysis on the Internet. There are bulls, bears, paper traders, physical buyers, technical analysts, hedge funds, commercial banks and silver manufacturers all trying to play a part in this highly volatile silver market. Trying to sift through the huge volumes of silver analysis on the internet can be extremely frustrating. In addition, some of this information is not meant to inform, but rather to confuse or mislead the investor.

European Bailout Infographic: Presenting The Truckloads Of Cash Needed To Rescue The Insolvent PIIGS
Submitted by Tyler Durden - ZeroHedge.com
...No, literally truckloads. Our friends at demonocracy.info have been kind enough to put together an infographic that explains the European bailout in simple, visual terms, that even the most innocent of FTL truckers can grasp without much exertion, for the simple reason that it shows all the bailouts amounts in terms of trucks of cash. And here is the kicker: one would need a 13 lane highway, filled with trucks bumper to bumper, stretching for about 3 kilometers to represent the €2.91 trillion in total amounts owed by the PIIGS and their citizens (whether voluntarily or not... actually make that involuntarily) to Europe's largest banks.

EU leaders agree on permanent bailout fund
Jan 30 (Reuters) - EU leaders reached agreement at a summit on Monday on the introduction of a permanent euro zone bailout mechanism from July 2012, with a treaty governing the fund to be signed at a later date, three EU officials told Reuters.
The European Stability Mechanism, which will have a lending capacity of 500 billion euros, will take over from the European Financial Stability Facility, a temporary mechanism that has so far been used to bail outIreland and Portugal.

European Leaders Agree to New Budget Discipline Measures
By STEPHEN CASTLE and JAMES KANTER - NYTimes.com
BRUSSELS — All but two European Union countries agreed Monday to new and tougher measures to enforce budget discipline in the euro zone, but the bloc still showed few signs of producing a comprehensive solution for the sovereign debt crisis or a credible plan to revive fragile economies across Europe’s weakened Mediterranean tier.
The meeting of 27 European Union heads of state and government here in Brussels was aimed at completing the text of a so-called fiscal compact for the 17 nations relying on or intending to join the euro zone — with only Britain and the Czech Republic opting not to adopt the measures.

Most EU nations to sign treaty to stop overspending
Pledge to boost growth, employment
By Sarah DiLorenzo
and Gabriele Steinhauser - AP - WashingtonTimes.com
BRUSSELS — All European Union countries except Britain and the Czech Republic agreed Monday to sign a new treaty designed to stop overspending in the eurozone and put an end to the bloc’s crippling debt crisis, while EU leaders also pledged to stimulate growth and employment.
The new treaty, known as the fiscal compact, was agreed on at a summit of European leaders in Brussels on Monday. It includes strict debt brakes and makes it more difficult for deficit sinners to escape sanctions. The 17 countries in the eurozone hope the tighter rules will restore confidence in their joint currency and convince investors that all of them will get their debts under control.

Portuguese storm gathers as EU leaders fight over Greece
Surging borrowing costs in Portugal have raised the spectre of a second full-fledged contagion crisis in the eurozone, eclipsing the latest efforts by European Union leaders in Brussels to agree on Europe's bail-out machinery and a strategy for Greece.
By Ambrose Evans-Pritchard - Telegraph.co.uk
Yields on Portuguese 10-year bonds hit a fresh record of 17.38pc on Monday even though the country is already shielded by a €78bn (£65.2bn) package from the EU, European Central Bank (ECB) and International Monetary Fund "troika" and does not have to tap the markets this year.
Reports also emerged on Monday night that European banks were gearing up to ask the ECB's emergency funding scheme for up to twice as much in funds as the central bank supplied in its debut €489bn auction last month.

Banks Tightening Credit to Europe: Fed
By Pedro da Costa - FOXNews.com
More than two thirds of banks in a Federal Reserve survey of senior loan officers said they had tightened credit to European financial firms in January, underscoring the continent's severe banking crisis.
The survey, published on Monday, also found U.S. banks snapping up business from their beleaguered European competitors, countering the notion that new regulations are hurting Wall Street's competitiveness.
"About half of the respondents who reported competing with European banks noted such an increase in business," The Fed said.

BBC Source - Merkel: "Greece Will Default"
BY CHRIS CIOVACCO - FinancialSense.com
As we outlined in the past, the levels of debt in Europe relative to tax revenues and capital needs for insolvent banks produce an unsustainable situation. Any additional funds given to Greece will most likely have similar outcomes to a flush of a toilet in the coming months. According to Bloomberg (01/28/2012), the Germans seem to agree:
Lawmakers from German Chancellor Angela Merkel’s coalition rejected increasing aid for Greece, Der Spiegel said, citing members of the parliament in Berlin. There can be no further aid if Greece doesn’t implement the agreed adjustment programs, the magazine said, citing Horst Seehofer, chairman of the Christian Social Union, the Bavarian sister party of Merkel’s Christian Democratic Union.

Angry Over Austerity Measures, Belgian Workers Go On Strike
By STEPHEN CASTLE - NYTimes.com
BRUSSELS — Belgium was paralyzed by a national strike Monday as unions, angry over austerity measures, timed the protest to coincide with a one-day meeting of European Union leaders here in the capital.
The rail network was shut down and flights were severely disrupted, with the airport at Charleroi, a hub for the low-cost carrier Ryanair, closed by the first general strike in Belgium since 1993.
Tram, bus and metro services in Brussels were suspended, transportation officials said. High-speed international trains, like the Eurostar from London and Thalys from Paris, were among those canceled.

This Is Europe's Scariest Chart
Submitted by Tyler Durden - ZeroHedge.com
Surging Greek and Portuguese bond yields? Plunging Italian bank stocks? The projected GDP of the Eurozone? In the grand scheme of things, while certainly disturbing, none of these data points actually tell us much about the secular shift within European society, and certainly are nothing that couldn't be fixed if the ECB were to gamble with hyperinflation and print an inordinate amount of fiat units diluting the capital base even further. No: the one chart that truly captures the latent fear behind the scenes in Europe is that showing youth unemployment in the continent's troubled countries (and frankly everywhere else). Because the last thing Europe needs is a discontented, disenfranchised, and devoid of hope youth roving the streets with nothing to do, easily susceptible to extremist and xenophobic tendencies: after all, it must be "someone's" fault that there are no job opportunities for anyone. Below we present the youth (16-24) unemployment in three select European countries (and the general Eurozone as a reference point). Some may be surprised to learn that while Portugal, and Greece, are quite bad, at 30.7% and 46.6% respectively, it is Spain where the youth unemployment pain is most acute: at 51.4%, more than half of the youth eligible for work does not have a job! Because the real question is if there is no hope for tomorrow, what is the opportunity cost of doing something stupid and quite irrational today?

20 Signs That Europe Is Plunging
Into A Full-Blown Economic Depression
EndOfTheAmericanDream.com
An economic nightmare is descending on Europe. With each passing month, the economic numbers across Europe get even worse. At this point it is becoming extremely difficult for anyone to deny that Europe is plunging into a full-blown economic depression. In fact, some parts of Europe are already there. In Spain the overall unemployment rate is over 22 percent, and in Greece one out of every five retail establishments has already been closed down. All over Europe, economic activity is rapidly slowing down, unemployment is skyrocketing and bad debts are unraveling. It isn't even going to take a default by a nation such as Greece or a collapse of the euro to push Europe into an economic depression. All Europe has to do is to stay on the exact path that it is on right now and it will get there. Normally, European governments would respond to an economic slowdown by increasing government spending. But this time most of them are already drowning in debt. Instead of increasing government spending, most governments in Europe are actually cutting back. All over Europe, national governments are being encouraged to implement even more tax increases and even more budget cuts. The hope is that all of this austerity will help solve the nightmarish sovereign debt crisis that Europe is facing. But unfortunately, all of these tax increases and budget cuts are also going to involve a tremendous amount of economic pain.

Davos 2012: Now it's the West's turn
to listen to wise words from the East
With his immaculately tailored suits and signature dicky bow, Donald Tsang, chief executive of Hong Kong, makes an unlikely prophet.
By Jeremy Warner - Telegraph.co.uk
But here in Davos, he's been talking more sense on the eurozone debt crisis than the entire massed ranks of Europe's policymaking elite put together.
So much so that I only half in jest propose that he swaps his job in Hong Kong to become head of the eurozone until the crisis is finally over.
Back in the 1990s, when Asia was enveloped by its own financial crisis, Asian leaders were plied with Western advice on the importance of swift and decisive action. The region acted accordingly and is now booming, with abundant reserves, strong growth, a robust banking system and, in Hong Kong at least, virtually non-existent unemployment.

Is the West finished? Perhaps not quite
For me, the defining image from Davos this year was the sight of Christine Lagarde, managing director of the International Monetary Fund, holding up an expensive-looking, designer leather holdall and saying: "I am here with my little bag to collect a bit of money."
By Jeremy Warner - Telegraph.co.uk
Nothing could be more representative of the shift from a West paralysed by debt and indecision to a fast-growing East than this faintly ridiculous piece of theatre, for what she was indeed doing at the World Economic Forum in Davos last week was trying to persuade the still comparatively poor developing world to contribute more to the IMF so it can bail out the relatively rich eurozone.

Fed's Plosser wanted more optimistic outlook
By Jonathan Spicer
(Reuters) - A top Federal Reserve official on Monday said he would have preferred a more optimistic statement on the U.S. economy, after the central bank last week painted a grim picture of the recovery and forecast ultra-low interest rates until late 2014.
"I thought it was a little bit pessimistic. I would have preferred a little more optimism in the outlook," Philadelphia Fed President Charles Plosser said on CNBC.
"It's not that we're going to take off like a sky rocket going into this year, but I do think things are looking better," he said, citing a drop in the unemployment rate to 8.5 percent, which is still historically high.

If The Economy Is Improving….
TheEconomicCollapseBlog.com
Everywhere you turn these days, someone is proclaiming that the economy is improving. Barack Obama is endlessly touting the "improvement" in the economy, the mainstream media is constantly talking about "the economic recovery" and an increasing number of Americans seem to be buying into this line of thinking. A new NBC/Wall Street Journal poll found that 37 percent of Americans believe that the economy will improve over the next year, while only 17 percent of Americans believe that it will get worse. But is the economy actually improving? Not really. At the moment things are relatively stable. Some economic statistics are improving slightly and some continue to get even worse. However, it is very important to keep in mind that one of the biggest reasons why things have stabilized is because the federal government is pumping more than a trillion dollars a year into the economy that it does not have.

Congress to subject itself to harsher penalties on insider trading
Congress expected to pass bill that would impose restrictions on the use of nonpublic information for personal benefit
AP - Guardian.co.uk
Congress hope to regain some sense of trust by policing itself with tougher penalties for insider trading and requiring they disclose stock transactions within 30 days.
A procedural vote Monday would allow the Senate later this week to pass a bill prohibiting members of Congress from using nonpublic information for their own personal benefit or "tipping" others to inside information that they could trade on.

MF Global: Money on Foreign Exchanges Remains Frozen
By Aaron Lucchetti - WSJ.com
While many MF Global customers grapple with the harsh reality that they may never get all their money back, there are some who are even worse off.
The bankruptcy trustee of MF Global’s U.S. brokerage unit has returned about 72% of the money in customer’s U.S. accounts when the New York firm filed for bankruptcy at the end of October.
By contrast, all the money of U.S. customers invested on foreign exchanges remains frozen.

MF Global: A Despicable State of Affairs
JESSE'S CAFÉ AMÉRICAIN
Much of the financial press picked up this story from the Wall Street Journal, Money From MF Global Feared Gone. Much of the mainstream media in the US and the UK these days is just a conduit for sound bites from the monied interests.
"Nearly three months after MF Global Holdings Ltd. collapsed, officials hunting for an estimated $1.2 billion in missing customer money increasingly believe that much of it might never be recovered, according to people familiar with the investigation.

CBO says federal employees rake in much more pay
Comparison with private sector likely to heat up debate over ending freeze
By Stephen Dinan-The Washington Times
Buoyed by generous benefit packages, federal workers earn significantly better compensation than similarly educated workers in the private sector, according to a report released Monday from Congress‘ chief scorekeeper that threatens to reignite at the national level last year’s state battles over public-employee rights.
Overall, federal workers earn 16 percent more in total compensation — including wages and benefits — than comparable private-sector employees, according to the Congressional Budget Office. Only private-sector workers with the highest levels of education, such as doctors and lawyers, earn more than their public counterparts.

Are Most Federal Workers Overpaid? CBO Says Yes
By Jordan Weissmann - TheAtlantic.com
The less educated you are, the better it is to work for the federal government -- at least when it comes to your paycheck.
That's more or less the finding of a new study by the Congressional Budget Office, which compared federal workforce compensation to the private sector using data from 2005 through 2010. The big headline figures, sure to make the rounds in conservative media, are that government employees made 2% more in wages, and 16% more in overall compensation, than their private sector counterparts. But as the graph below shows, there were vast variations between education levels.

Waist Deep in the Big Muddy
By Peter Schiff - 321Gold.com
With its announcement this week that it will keep interest rates near zero until at least late 2014, the Federal Reserve has put another large crack into the foundations underlying the US dollar. In a misguided attempt to provide clarity and transparency, Ben Bernanke has instead laid out a simple road map for economists and investors to follow. The signposts are easily understood: the Fed will stop at nothing in pursuing its goals of creating phantom GDP growth, holding down unemployment, propping up stock and housing prices, and monetizing government debt. To do so, it will continue to pursue a policy of negative interest rates, while ignoring the collateral damage of unsustainable debt, virulent inflation, misallocated resources and credit, suffering yield-dependent retirees, and a devalued U.S. currency.

U.S. consumers fizzle out even as incomes rise
By Lucia Mutikani
(Reuters) - U.S. consumer spending was flat in December as households put the largest rise in income in nine months into their savings, potentially signaling slower consumption early in 2012.
It was the weakest reading on spending since June, the Commerce Department said on Monday, and it followed two tepid gains in October and November.
Still, economists were cautiously optimistic that rising wages as labor markets improve will keep demand supported.

Making Money On Poverty: JP Morgan Makes Bigger Profits When The Number Of Americans On Food Stamps Goes Up
TheEconomicCollapseBlog.com
How would you feel if someone told you that one of the largest banks on Wall Street makes more money whenever the number of Americans on food stamps goes up? Unfortunately, this is something that is actually true. In the United States today, one out of every seven Americans is on food stamps. In fact, the number of Americans on food stamps has increased by a whopping 14 million since Barack Obama entered the White House. All of this makes JP Morgan very happy, because JP Morgan has been making money by the boatload on food stamps. Right now, JP Morgan Chase issues food stamp debit cards in 26 U.S. states and the District of Columbia. The division of JP Morgan Chase that issues these debit cards made an eye-popping 5.47 billion dollars in net revenue during 2010. JP Morgan is paid per customer, so when the number of Americans on food stamps goes up, they make more money. But doesn't this give JP Morgan an incentive to try to keep the number of Americans on food stamps as high as possible? Of course it does. JP Morgan is interested in making money as rapidly as possible. If JP Morgan can get more Americans enrolled in the food stamp program and keep them enrolled in it for as long as possible, that is good for business.

Florida's housing crisis:
'There's not a politician out there willing to help'
Years after the housing bubble burst, residents in the Sunshine State continue to face the heartbreak of home foreclosure
By Karen McVeigh - Guardian.co.uk
At the county court in downtown Miami, a stooped, elderly man smartly dressed in a light suit jacket, stands in front of the judge's bench as he tries to cancel the imminent sale of his house.
"I spoke to the bank, they gave me papers" he said.
"You'll have to file notice and notice on the day is not enough," the judge replies. "I wish there was some way I could help, I'm sorry."
Asked later what will happen, the man shrugs. "I've lost the apartment. Which I gave $85,000 in cash for."

Freddie Mac’s Crimes Against Homeowners
are NOT an Isolated Incident
By Martin Andelman - ML-Implode
ProPublica is reporting that Freddie Mac has been placing “multi-billion dollar bets designed to only pay off when homeowners remain “trapped” in high interest rate loans, and that the government-owned mortgage monster began increasing such bets late in 2010, which they say is, "the same time Freddie was making harder for homeowners to get out of high-interest mortgages."
Now, the ProPublica story goes on to say…

"No evidence has emerged that these decisions were coordinated. The company is a key gatekeeper for home loans but says its traders are “walled off” from the officials who have restricted homeowners from taking advantage of historically low interest rates by imposing higher fees and new rules."

Outrageous! The Government Is Giving Out Free Cell Phones And Free Cell Phone Minutes To Welfare Recipients
TheEconomicCollapseBlog.com
Did you know that the federal government is giving out free cell phones and free cell phone minutes to welfare recipients? It may be hard to believe, but it is true. Right now, there are companies that are running advertisements specifically targeted at low income Americans informing them of the fact that all they have to do is sign up and they can get a free cell phone and hundreds of free cell phone minutes every single month and it will all be paid for by the federal government. Some have referred to this as "The Obama Phone", but that is not exactly accurate. The outrageous federal programs that are paying for this were initiated before Barack Obama entered the White House. But the fact that welfare recipients have been receiving free cell phones and free cell phone minutes under both the Bush and Obama administrations has been confirmed as being true by Snopes. All of this is paid for by "the federal Universal Service Fund". That is one of those annoying little taxes that you may have noticed on your phone bill. So what is essentially happening is the federal government is taking money from all of us so that they can provide free cell phone service for welfare recipients every single month.

FCC to reform telephone subsidies,
could eliminate Link Up to fight corruption
By Tim Devaney-The Washington Times
The Federal Communications Commission is considering big changes in two telephone subsidy programs for low-income customers that would combat corruption and make room for a new broadband Internet subsidy.
The FCC could eliminate Link Up, a one-time $30 credit that covers the cost of the installation fee for landlines or activation fee for cellphones, Commissioner Robert McDowell, the group’s lone Republican, told The Washington Times. Thecommission is also looking to weed out fraudulent customers from its sister program, Lifeline, which provides a $10 monthly credit to subsidize phone service.

Ill. nuclear reactor loses power, venting steam
BYRON, Ill. (AP) -- A nuclear reactor at a northern Illinois plant shut down Monday after losing power, and steam was being vented to reduce pressure, according to officials from Exelon Nuclear and federal regulators.
Unit 2 at Byron Generating Station, about 95 miles northwest of Chicago, shut down at 10:18 a.m., after losing power, Exelon officials said. Diesel generators began supplying power to the plant, and operators began releasing steam to cool the reactor from the part of the plant where turbines are producing electricity, not from within the nuclear reactor itself, officials said.

BIG BROTHER INTERNET
By Paul Craig Roberts - PaulCraigRoberts.org
Dear friends: I am pleased to bring to you Gerald Celente’s assessment of the threats posed to Internet freedom. Celente’s Trends Journal is one of the most insightful publications of our era. PCR
Do you remember the Safe-Cyber instructions they taught you in the mandatory Computer Ed class (operated by the National Institute of Standards and Technology)? First you fire up your Secured Computing Device (SCD) and its hardware token authenticator.
Then you enter the six-digit algorithmically generated password displayed (a new one flashes every 60 seconds) and are asked to supply your biometric identifier. You place your thumb on the built-in fingerprint pad, click, and wait for the Internet connection to begin. But it doesn’t.

Quietly, U.S. Moves to Block Lawsuits by Military Families
Why is the Justice Department trying to make it more difficult for service members and their families to sue the government for medical malpractice?
By Andrew Cohen - TheAtlantic.com
Politicians and bureaucrats of all persuasions typically trip over themselves when it comes to praising the values and virtues, the courage and the sacrifice, of America's military families. East Coast. West Coast. Red State. Blue State. Democrats. Republicans. It doesn't matter. Everyone wants to stand up in public and say that brave and stoic military families should get the best that America can offer (cue the applause). Take the First Lady herself, Michelle Obama, who has worked consistently with and for these families since 2009.

Regarding Social Programs and Government Outlays:
The Money Simply Isn't There
By Graham Summers - GoldSeek.com
The coming years will be marked by a seismic change in the economic landscape in the US. Firstly and most importantly, we are going to see economic growth slow down dramatically. Jeremy Grantham, an asset manager I respect, believes we’ll see global growth at 2% over the next seven years. Personally I believe it could be even lower than that.
The reasons for this slow down are myriad but the most important are:

1) Age demographics: a growing percentage of the population will be retiring while fewer younger people are entering the workforce.
2) Excessive debt overhang.
3) A return to more frugal "common sense" spending patterns in the developed world.
4) Political and Geopolitical uncertainty.

What You Need to Know Before Investing in Facebook
Posted by Gerri Willis - FOXBusiness.com
The social networking site, Facebook, goes public this week in what could be the biggest ever IPO, and a lot of people are going to get rich.
But while insiders and friends of bankers will make a mint, individual investors, well, forget about it.
In fact, I believe the IPO market is stacked against regular investors.
IPOs are exhibit number one when we talk about an uneven playing field for individual investors in today's equities markets.

In Victory for the West,
W.T.O. Orders China to Stop Export Taxes on Minerals
By KEITH BRADSHER - NYTimes.com
HONG KONG — The appeals panel of the World Trade Organizationruled on Monday that China must dismantle its system of export taxes and quotas for nine widely used industrial materials.
The legal setback for Beijing could set a precedent for the West to challenge China’s export restrictions on other natural resources, including rare earthmetals that are crucial to many modern technologies, trade experts said.

U.S. Drones Patrolling Its Skies Provoke Outrage in Iraq
By ERIC SCHMITT and MICHAEL S. SCHMIDT - NYTimes.com
BAGHDAD — A month after the last American troops left Iraq, the State Department is operating a small fleet of surveillance drones here to help protect the United States Embassy and consulates, as well as American personnel. Some senior Iraqi officials expressed outrage at the program, saying the unarmed aircraft are an affront to Iraqi sovereignty.
The program was described by the department’s diplomatic security branch in a little-noticed section of its most recent annual report and outlined in broad terms in a two-page online prospectus for companies that might bid on a contract to manage the program. It foreshadows a possible expansion of unmanned drone operations into the diplomatic arm of the American government; until now they have been mainly the province of the Pentagon and the Central Intelligence Agency.

Americans barred from leaving Egypt
seek refuge at US embassy in Cairo
Three US citizens move into embassy as tensions mount over Egyptian crackdown on pro-democracy and human rights groups
By Ben Quinn and agencies - Guardain.co.uk
Three Americans barred by Egyptian authorities from leaving the country have sought refuge at the United States embassy in Cairo. Tensions between the two states have escalated following unprecedented raids by security forces on a number of human rights and pro-democracy organisations working in Egypt.
Organisations targeted during the December raids included the US-government funded National Democratic Institute (NDI) – founded by former secretary of state Madeleine Albright – and the International Republican Institute (IRI), whose chairman is Republican senator John McCain.

Clinton to attend U.N. meeting on Syria
By Karen DeYoung - WashingtonPost.com
Secretary of State Hillary Rodham Clinton condemned “in the strongest possible terms” the escalation of Syrian government attacks on opposition protesters and said she would voice American concerns at a U.N. Security Council meeting on the subject Tuesday.
The intensified diplomacy came amid ongoing fighting between government and opposition forces on the outskirts of Damascus. In skirmishes throughout Monday, forces loyal to President Bashar al-Assad appeared to have pushed back rebel soldiers fighting for the Free Syrian Army from districts on the eastern edge of the capital.

Fighting Escalates in Syria as Opposition Rejects Russian Plan
By NEIL MacFARQUHAR and KAREEM FAHIM - NYTimes.com
UNITED NATIONS — As Syrian forces continued to fight rebel forces on the doorstep of Damascus on Monday, some of the world’s top diplomats converged on the United Nations to try to press President Bashar al-Assad to leave office through a Security Council resolution.
Much of the attention was focused onRussia, which strongly opposes an Arab League proposal, backed by Western and Arab diplomats, that calls for Mr. Assad to cede power as part of a transition to democracy.

Support grows for Syrian peace plan
UK, US and France to push Security Council to back Arab proposal
By James Blitz and Roula Khalaf in London,
and Charles Clover in Moscow - FT.com
Britain, France and the US will be making their most forceful push yet for a political transition in Syria at the UN Security Council this week, lending support to an Arab plan that they hope will overcome Russian opposition.
As Syrian forces move to assert their control over Damascus suburbs that have fallen into the hands of the opposition in the more than 10-month uprising, the foreign ministers of France, the UK and the US will be in New York on Tuesday to listen to a briefing from senior Arab officials.

Navy wants commando ‘mothership’ in Middle East
By Craig Whitlock - WashingtonPost.com
The Pentagon is rushing to send a large floating base for commando teams to the Middle East as tensions rise with Iran, al-Qaeda in Yemen and Somali pirates, among other threats.
In response to requests from U.S. Central Command, which oversees military operations in the Middle East, the Navy is converting an aging warship it had planned to decommission into a makeshift staging base for the commandos. Unofficially dubbed a “mothership,” the floating base could accommodate smaller high-speed boats and helicopters commonly used by Navy SEALs, procurement documents show.

* * * * *

State of Denial in Coming War Catastrophe
By Greg Hunter’s USAWatchdog.com
The world economy is in the tank, and the Federal Reserve’s decision to extend its zero interest rate policy to, at least, the end of 2014 proves it. What will happen if the fragile world economy also has to deal with a war with Iran? That should have been the big headline coming out of the World Economic Forum in Davos, Switzerland, but what was reported was concern over slow or no growth in the world. All the signs are that the West is careening towards war with Iran, and there is not a peep about it from world leaders. Are they in a state of denial in a coming war catastrophe? I say yes.
One of the first shots fired by the EU was in the form of increased sanctions to boycott Iranian oil in about five months. The second shot looks like it will be fired by the Iranians who won’t wait for sanctions to kick in and will move to cut off oil exports of around 600,000 barrels a day to the Eurozone. (Click here for more on this story.) The Iranians have not yet cut off the oil. MSNBC reported yesterday, "The Islamic Republic declared itself optimistic about a visit by U.N. nuclear experts that began on Sunday but also warned the inspectors to be "professional" or see Tehran reducing cooperation with the world body on atomic matters. The International Atomic Energy Agency (IAEA) inspection delegation will seek to advance efforts to resolve a row about nuclear work which Iran says is for making electricity but the West suspects is aimed at seeking a nuclear weapon."

Imagining a "Clean Break" with Israel…Over Iran
by GARY LEUPP - CounterPunch.com
The world of science acknowledges matter-of-factly that Iran is not pursuing a nuclear weapons program. There is simply no evidence for one. The UN’s International Atomic Energy Agency, staffed by specialists on nuclear power and maintaining a tight watch on Iran’s civilian facilities, finds no evidence of a military program. Two successive reports (National Intelligence Estimates) produced in 2007 and 2010 by all 16 U.S. intelligence agencies have declared with confidence that there is no operative weapons program. U.S. Defense Secretary Leon Panetta and even Israel’s Defense Minister Ehud Barak have both recently stated or let it slip that Iran is not currently attempting to build nuclear weapons.

The Onus is on Washington, as Usual
Fingers Itch for a War on Iran
by VIJAY PRASHAD - CounterPunch.com
If you ask Iranians, they will tell you that the war against Iran has already begun. Some will take you back to 1953, when the US fired its first shot across the bow, taking out a democratically elected government in a CIA coup. Others will point to the political and financial subvention given to Saddam Hussein by the Atlantic states and the Gulf emirs to invade Iran and crush the Iranian Revolution of 1979. Millions died in that futile war, whose conclusion left a battered Saddam turning to the Gulf Arabs, an unpaid bill in hand. It was the Gulf Arab reticence to pay up that led to Iraq’s invasion of Kuwait, and the full-scale entry of US troops into Saudi Arabia (which enraged Osama Bin Laden and his minions) and into a decades long war against Iraq (1991-2011). This is all true as context: there has been a long-standing animosity between the Atlantic powers and Iranian democratic ambitions.

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Monday 01.30.2012

Bank Failures #4 and 5 in 2012: Florida and Tennessee
From the FDIC: CenterState Bank of Florida, National Association, Winter Haven, Florida, Assumes All of the Deposits of First Guaranty Bank and Trust Company of Jacksonville, Jacksonville, Florida
From the FDIC: Republic Bank & Trust Company, Louisville, Kentucky, Assumes All of the Deposits of Tennessee Commerce Bank, Franklin, Tennessee.

Bank Failure #6 & 7: Tennessee and Minnesota
by CalculatedRisk
From the FDIC: First Resource Bank, Savage, Minnesota, Assumes All of the Deposits of Patriot Bank Minnesota, Forest Lake, Minnesota...
From the FDIC: U.S. Bank National Association, Cincinnati, Ohio, Assumes All of the Deposits of BankEast, Knoxville, Tennessee.

Why gold may be a better investment
than a pension for retirement
CommodityOnline.com
The word 'pension' never seems to be far from the headlines at the minute. Pensions were obviously the cause of the recent industrial action at the end of 2011, whilst pensions were also at the heart of George Osborne’s autumn statement last year as the news that the rise in the state pension age to 67 was to be brought forward to 2026 from 2034.
Indeed the days of your pension maintaining a particular type of lifestyle when you retire are well and truly over. It has come to be accepted that retirement brings frugality.

Ron Paul - Gold / Fiat Money

Silver may outperform gold in near term
By Debbie Carlson - CommodityOnline.com
Gold could build on its rally into next week and possibly close out the month of January with a gain, market participants said.
Countries that celebrate the Lunar New Year, such as China, will return to work next week, and others said that momentum that started following the dovish statement by the Federal Open Market Committee on its long-term interest rate outlook will likely continue.

Gold-S&P ratio indicates weak stocks and surging gold
By Jordan Roy-Byrne - CommodityOnline.com
It has been a tough last year for precious metals investors but not so much for common stocks. Sure, the Euro crisis benefited Gold initially but as the panic has abated, stocks are rallying back to their highs while Gold has sold off and the gold stocks are trying to hold their lows. What is going on? Are we in the twilight zone?

Gerald Celente - Talk Radio Europe - 24 January 2012

Ackermann Says Greek Default Would Be 'Playing With Fire'
By Christine Harper - Bloomberg.com
The economic and political consequences of Greece defaulting instead of reaching a voluntary debt-restructuring deal are being underestimated, Deutsche Bank AG (DBK) Chief Executive OfficerJosef Ackermann said.
"Default risk is much higher than what people normally take into account," Ackermann said today in an interview at the World Economic Forum in Davos, Switzerland. "You see already that some markets are nervous about certain countries," he said. “That is playing with fire if you think that a default will have no impact."

IIF Says Expects to Conclude Deal on Greek Swap Next Week
By Maria Petrakis - Bloomberg.com
The Institute of International Finance, which represents private holders of Greek debt in talks with the Greek government, said further progress was made in discussions in Athens today and that a final deal will be concluded in the coming week.
"Further progress was made, building on the understandings reached yesterday on the key legal and technical issues," the IIF said in an e-mailed statement today. "We are close to the finalization of a voluntary PSI within the framework expressed publicly earlier this week by Luxembourg Prime Minister Jean- Claude Juncker in his capacity as chairman of the Eurogroup. We expect to conclude next week as discussions on other issues move forward."

Greece - Between Iran and a Hard Place
By John Daly - OilPrice.com
Well, its official – on 23 January European Union foreign ministers agreed to ban the import of Iranian oil as part of sanctions designed to pressure Iran to end its alleged covert pursuit of nuclear weapons under the guise of its civilian nuclear uranium enrichment program.
Measures approved by Brussels Eurocrats include an immediate ban on the signing of new supply contracts for Iranian crude oil and petroleum products for EU refineries, with existing contracts being scheduled for phasing out by 1 July. The EU currently buys around 20 percent of Iran's oil exports. The International Energy Agency estimate that the European embargo will lead to roughly 600,000 barrels of oil being removed from the European market daily.

Jim Rogers - This Could Cause Chaos

The Report That Will Blow Up The Eurozone
TheAutomaticEarth.com
By Ilargi: No, I’m not talking about the fact that Germany and Holland want to take over as the de facto government in Greece, as Noah Barkin writes for Reuters (that they want to do it through Brussels is a mere technicality).
Germany wants Greece to give up budget control
Germany is pushing for Greece to relinquish control over its budget policy to European institutions as part of discussions over a second rescue package, a European source told Reuters on Friday.
"There are internal discussions within the Euro group and proposals, one of which comes from Germany, on how to constructively treat country aid programs that are continuously off track, whether this can simply be ignored or whether we say that's enough," the source said.

The $1.2 Tril Gap:
Obama's Subpar Recovery Continues
Investors.com
Economy: The latest economic data make it clear that President Obama's policies aren't helping the country get stronger. Rather, they're smothering what should have been a solid recovery.
Real GDP climbed a less-than-expected 2.8% in final quarter of 2011, and just 1.7% for the entire year, down from 3% in 2010. The trend of subpar growth under Obama continues.
To get a better sense of how bad Obama's recovery is, consider this: Under Obama, real GDP has climbed a total of just 6% in the two-and-a-half years since the recession ended in June 2009.

Why Capital Flows Uphill
Keyu Jin - Project-Syndicate.org
LONDON – At first, it seems difficult to grasp: global capital is flowing from poor to rich countries. Emerging-market countries run current-account surpluses, while advanced economies have deficits. One would expect fast-growing, capital-scarce (and young) developing countries to be importing capital from the rest of world to finance consumption and investment. So, why are they sending capital to richer countries, instead?
China is a case in point. With its current-account surplus averaging 5.5% of GDP in 2000-2008, China has become one of the world’s largest lenders. Despite its rapid growth and promising investment opportunities, the country has persistently been sending a significant portion of its savings overseas.

CNBC 26 Jan 2012

Simpson Says 'Terrified' Obama
Walked Away From Deficit in State of Union
By Julie Bykowicz - Bloomberg.com
President Barack Obama “walked away" from his bipartisan U.S. deficit-cutting commission’s plan "because he knew he’d be torn to bits," said former Republican Senator Alan Simpson, who was co-chairman of the panel.
Obama is “terrified” of the deficit issue, Simpson said in an interview on Bloomberg Television’s "Political Capital with Al Hunt," airing this weekend. "He didn't deal with it" in his annual State of the Union address to Congress on Jan. 24.

Keiser Report: State Of The Banana (E242)
In this episode, Max Keiser and co-host, Stacy Herbert, discuss the State of the Banana Republic, the blowout at Apple with its profits 'trapped' overseas and the gloomy State of the Stiff Upper Lip as UK family debts soar by nearly 50%. And, finally, Max and Stacy examine a proposal that bankers, like Goldman Sachs' Lloyd Blankfein and JP Morgan's Jamie Dimon, should compete like strippers on the open job market.

Obama Expands Aid For Delinquent Homeowners
By Lorraine Woellert - Bloomberg.com
The Obama administration, seeking to help more homeowners lower their interest rates and shed mortgage debt, will relax the rules on a federal loan- modification program and triple its incentives to banks.
The revised Home Affordable Modification Program, or HAMP, also would pay Fannie Mae and Freddie Mac (FMCC) to forgive debt on homes that have lost value. The government-owned companies, citing cost, don’t reduce principal, a policy that has limited HAMP’s reach because they own or guarantee nearly half of U.S. home loans.

When Will Housing Hit Bottom?
By Megan McArdle - TheAtlantic.com
The National Association of Realtors is (quelle surprise!) quite bullish on the future of the housing market. Not so fast, says Lance Roberts of StreetTalk Advisors:
He sees 2012 as another year of lagging sales, considering the average household debt for Americans over the age of 16 comes to $96,229 per person. In addition, the average income before taxes is roughly $54,110 and many Americans have a debt-to-income ratio of 177.8%, making it difficult for them to qualify for a home loan.

Has Housing Really Bottomed?
By Charles Hugh Smith -OfTwoMinds.com
Massive intervention by Federal agencies and the Federal Reserve have kept the market from discovering price and the risk premium in real estate. That sets up a "catch the falling knife" possibility for impatient real estate investors.
A substantial percentage of many households' net worth is comprised of the equity in their home. With the beating home prices have taken since 2007, existing and soon-to-be homeowners are keen to know: Are prices stabilizing? Will they begin to recover from here? Or is the "knife" still falling?

REO-to-rentals another Fed subsidy for big investors and select banks. Federal Reserve looking to engineer yet another bailout for key banking allies. Fed acknowledges 12,000,000 homes with negative equity.
DoctorHousingBubble.com
The Federal Reserve recently came out with an unprecedented analysis directed to the Committee on Financial Services regarding various methods to improving the housing market. The paper is striking because it magnifies how little was learned from this banking and housing debacle. One of the big recommendations centers on creating a "REO to rental" program by facilitating bulk sales to large investors. Ironically the Federal Reserve by bailing out select banks has allowed home values to remain inflated thus causing this backup in inventory to emerge in the first place. Setting that obvious point aside, let us examine the merits of an REO to rental program.

Keiser Report: Kill Hollywood! (E241)
In this episode, Max Keiser and co-host, Stacy Herbert, discuss killing Hollywood, poor Chris Dodd and how Mubarak's fall brought about the assault on the internet. In the second half of the show, Max interviews Mike Ruppert about SOPA, the NDAA and Iranian oil.

California Orders Automakers to Sell More Non-Polluting Cars
By Alan Ohnsman and James Nash - Bloomberg.com
California will require automakers to sell millions of “zero-emission” vehicles -- battery- electric, plug-in hybrid and hydrogen-powered -- setting new standards followed by states from New York to Oregon.
The rules adopted today by the California Air Resources Board mean manufacturers will have to produce about 1.4 million advanced vehicles for sale in that state alone by 2025, more than 40 times the number put on the road from 1996 through 2010, according to a state analysis.

Peter Schiff RTTV - 24 January 2012

Peter Schiff, Rt America - 25 January 2012

Freedom and Federalism
Mises Daily: Friday, January 27, 2012 by Thomas J. DiLorenzo
Americans — and much of the rest of the world — have been deprived of one of the most important means of establishing and maintaining a free society, namely, federalism or states' rights. It is not just an accident that states' rights have either been relegated to the memory hole, or denigrated as a tool of racists and other miscreants. The Jeffersonian states'-rights tradition was — and is — the key to understanding why Thomas Jefferson believed that the best government is that which governs least, and that a limited constitutional government was indeed possible.

What Are "States' Rights"?
The idea of states' rights is most closely associated with the political philosophy of Thomas Jefferson and his political heirs. Jefferson himself never entertained the idea that "states have rights," as some of the less educated critics of the idea have claimed. Of course "states" don't have rights. The essence of Jefferson's idea is that if the people are to be the masters rather than the servants of their own government, then they must have some vehicle with which to control that government. That vehicle, in the Jeffersonian tradition, is political communities organized at the state and local level. That is how the people were to monitor, control, discipline, and even abolish, if need be, their own government.

WHOM DO YOU TRUST?
By John Hinderaker - PowerlineBlog.com
Not too many months ago, likely voters trusted Republicans over Democrats on all ten top issues. It was probably too much to expect those heady days to continue, and I suspect that the GOP presidential primary season has damaged the party’s standing. That is unfortunate: if the Republican candidates had devoted their energies to non-stop attacks on President Obama, the result would have been positive. Unfortunately, that didn’t happen, and the bashing of fellow Republicans that we have seen over the last couple of months has no doubt damaged the party’s brand.

Wolf Blitzer says that Ron Paul is the only candidate that will reduce spending

Newt Gingrich's Space Oddity
by Kent Hoover - Portfolio.com
Ground control to Major Newt: Your proposal to build a colony on the moon has subjected you to ridicule and accusations that you’re pandering to voters on Florida’s Space Coast. Don’t worry about that—take your protein pills and put your helmet on, and keep giving us those big ideas!
Newt Gingrich took some hits last night from his rivals for the Republican presidential nomination over his proposal to build a colony on the moon.
"If I had a business executive come to me and say I want to spend a few hundred billion dollars to put a colony on the moon, I’d say, ‘You’re fired," said Mitt Romney.

Freedom Watch -
Judge Napolitano: Newt Gingrich Caught in a Lie?

ACTA = Global Internet Censorship – Now Even Foreign Governments Will Be Able To Have Your Website Shut Down
EndOfTheAmericanDream.com
Global Internet censorship is here. SOPA and PIPA have been stopped (at least for now) in the United States, but a treaty known as ACTA (the Anti-Counterfeiting Trade Agreement) is far worse than either of them. ACTA was quietly signed by Barack Obama back on October 1st, 2011 and most Americans have never even heard of it. But it could mean the end of the Internet as we know it. This new treaty gives foreign governments and copyright owners incredibly broad powers. If you are alleged to have violated a copyright, your website can be shut down without a trial and police may even show up at your door to take you to prison. It doesn't even have to be someone in the United States that is accusing you. It could just be a foreign government or a copyright owner halfway across the world that alleges that you have violated a copyright. It doesn't matter. So far, the U.S., the EU and seven other nations have signed on to ACTA, and the number of participants is expected to continue to grow. The "powers that be" are obsessed with getting Internet censorship one way or another. The open and free Internet that you and I have been enjoying for all these years is about to change, and not for the better.

Why Free Speech is an All or Nothing Deal
Floyd Abrams on Free Expression, Broadcast Regulation, WikiLeaks, Citizens United and SOPA
by Jonathan Peters - HLPRonline.com
What’s the most serious threat today to free expression?
I would say, to begin, that First Amendment law is in good shape, that there is a high level of protection for freedom of expression with the current Supreme Court. Although there are some cases with which I disagree, the Court has been highly solicitous of First Amendment interests. That said, there’s too much legislation and regulation adopted on the basis of content. One example would be the rights of broadcasters. They are relegated to a second level of protection, to being judged by standards that couldn’t survive First Amendment scrutiny if applied to newspapers, the Internet or other outlets.

BarnhardtPatrickHenrySpeech.mp4

U.S. military sales to foreign nations doubles
Dayton Business Journal by Joe Cogliano
Sales of military weapons to foreign countries have risen dramatically in the most recent four-year period, with sales to top 10 buyers more than doubling from the previous period.
The 10 contries that bought the most U.S. military goods and services from 2007 to 2010 placed combined orders of $66.3 billion, up from $29.4 billion in the 2003 to 2006 periods, according to data from the Congressional Research Service.

Violence Sweeps Central America
by PAUL IMISON - CounterPunch.org
Mexico City- While Mexico grabs the headlines of soaring murder rates and rampaging drug gangs, the really heavy bloodshed is taking place to the south. The much smaller nations of Guatemala and El Salvador are seeing their worst violence since the civil wars of the 1980s, while Honduras is currently the murder capital of the world with 86 homicides per 100,000 inhabitants; a murder rate nearly five times higher than Mexico’s.
Even relatively peaceful Costa Rica, which boasts the highest standard of living in Central America, has seen its murder rate double since 2004 in a wave of violence that authorities largely attribute to drug-trafficking. As a result, Washington is encouraging its mostly right-wing allies in the region to pursue the same policies of militarization that have devastated Colombia and Mexico.

Rand Paul TSA Leaked Security Footage of Detainment 2012

Arab League Suspends Syrian Mission
By Glen Carey and Mourad Haroutunian - Bloomberg.com
The Arab League suspended its observer mission in Syria as forces loyal to President Bashar al-Assad pressed on with a deadly attacks against protesters in areas of the country strengthened by army defectors.
The 22-member group halted the mission due to "the grave deterioration of the situation in Syria, and the continuation of violence and exchange of shelling and shooting," the group’s secretary-general, Nabil El-Arabi, said in a statement.

Looking into the Syrian abyss
By Derek Henry Flood - ATimes.com
ANTAKYA, Hatay province southern Turkey - Five weeks before the beginning of Syria's unarmed uprising against the rule of President Bashar al-Assad, Turkish Prime Minister Recip Tayyip Erdogan and his Syrian counterpart Prime Minister Mohammad Naji Otri laid a symbolic cornerstone for the so-called "Friendship Dam" that was to help control the course of the Orontes River (known as the Asi River in Turkey) that flows through what has traditionally been - and is once again - a bitterly divided Levant region.
Otri declared to the state Syrian Arab News Agency that the dam would be "an important symbol on the edifice of the strategic relations" that would revive a long neglected border region that has been littered with land mines for a lengthy party of its post-colonial existence.

Saudi Official Calls for Nuclear Weapons-Free Zone in Mideast
Prince Turki Al Faisal warned of a nuclear arms race without a region-wide agreement
by John Glaser - AntiWar.com
A prominent member of the Saudi royal family has called for a nuclear weapons-free zone in the Middle East, warning of the potential for a nuclear arms race in the region.
Prince Turki Al Faisal urged the five permanent U.N. Security Council members to guarantee a nuclear security umbrella for Mideast countries that agree to a nuclear weapons-free zone and impose sanctions on countries that develop or maintain nuclear weapons.

Build up to WW3 - CHINA is hiding 3,000 Underground NUKES! Are they preparing for something?

Growing elite opposition to strike on Iran
By Jim Lobe - ATimes.com
WASHINGTON - Like the imminent prospect of one's hanging, to paraphrase the 18th century British essayist Dr (Samuel) Johnson, the suddenly looming possibility of war can concentrate the mind wonderfully.
If that aphorism didn't apply in the run-up to the United States invasion of Iraq nearly 10 years ago, it appears to be the case now for key sectors of the US foreign-policy elite - notably, liberal hawks who supported the Iraq war - with regard to the sharp rise in tensions between Iran and both the US and Israel earlier this month.

Gerald Celente on Iran War

Iran to halt oil sales to 'some countries'
By Najmeh Bozorgmehr in Tehran - FT.com
Iran’s oil minister said on Sunday that oil sales to "some countries" would be halted soon, amid pressure from the parliament that the government should pre-empt a looming European embargo.
"Iran has a market for its oil exports even with cuts [in sales] to Europe and will face no problem in this regard," Rostam Ghasemi told local journalists.
But the Iranian parliament failed to pass a proposed law over the weekend that would have banned oil exports to the European Union, apparently because of differences between the legislative body and the government of Mahmoud Ahmadi-Nejad.

Iran to take Action Against the West
by Banning Oil Exports to the EU?
By James Burgess - OilPrice.com
Following the recent agreement by the EU to impose trade sanctions against Iran the Iranian parliament will debate a law that could halt all oil exports to the continent.
"On Sunday, parliament will have to approve a 'double emergency' bill calling for a halt in the export of Iranian oil to Europe starting next week," Hossein Ibrahimi, vice-chairman of parliament's national security and foreign policy committee, was quoted as saying.

Answering Iran
Richard N. Haass - Project-Syndicate.org
NEW YORK – We know quite a bit about Iran’s nuclear program, and what we know is not encouraging. Iran is reported to be enriching uranium at two sites – some of it to levels of 20%, far beyond what is required for civilian purposes. The International Atomic Energy Agency also reports that Iran is carrying out research to develop designs for nuclear warheads. In short, Iranian officials’ claims that their nuclear program is aimed solely at power generation or medical research lacks all plausibility.

LINDSEY WILLIAMS - 2012 agenda for the ILLUMINATI

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Friday 01.27.2012

Gold Bulls Ascendant Amid Best Start to Year in Three Decades: Commodities
By Nicholas Larkin - Bloomberg.com
Gold traders are bullish for a fourth consecutive week, betting that theFederal Reserve’s pledge to keep interest rates low until late 2014 will extend the metal’s best start to a year in more than three decades.
Nine of 15 surveyed by Bloomberg expect prices to gain next week. The value of gold held in exchange-traded products jumped $3.9 billion on Jan. 25, the most since October, as the central bank laid the groundwork for a possible third round of asset purchases, data compiled by Bloomberg show. Lower interest rates increase the appeal of bullion because it generally earns investors returns only through price gains.

Gold, silver rally sharply
in wake of Federal Reserve FOMC statement
LONDON (Commodity Online): Comex Gold and Silverfutures are posting solid rallies and have hit fresh six-week highs in the aftermath of the release of the Federal Reserve's FOMC statement following the committee's meeting Wednesday.
While the FOMC statement was mostly unchanged from the previous meeting's statement, the U.S. dollar index did sell off modestly and Crude Oil prices rallied following the report. The FOMC statement did hint to the market place that the Federal Reserve will continue its very accommodative monetary policy for quite some time to come--at least through 2014, said the Fed.

Gold Surges Past $1700 On FOMC,
As Bernanke Says QE3 Still An Option
By Agustino Fontevecchia, Forbes Staff
The latest FOMC statementsurprised many, suggesting the economic outlook faces significant downside risks and announcing interest rates would remain zero-bound for even longer than before, until at least late-2014. Gold, which jumped on the news, is poised to benefit from additional easing and the possibility of further monetary stimulus in the form of QE3.
Gold, which had traded in negative territory through most of the session, surged on the Fed’s statement. While few expected Chairman Bernanke to give markets a third round of quantitative easing, several asset classes responded to what can be seen as additional easing.

Chinese New Year 2012: Year of Dragon Said to Boost Gold
By Roland Li | IBTimes.co.uk
The Chinese New Year celebration is expected to increase strong demand for gold in Asia, according to industry experts.
"Gold is traditionally bought as a gift during the Chinese New Year, and 2012 looks set to be a strong year for demand" said Albert Cheng, managing director, Far East, of the World Gold Council, in a statement. "We see this as part of a longer-term trend."

Volcker confirms central bank need to suppress gold
to stabilize exchange rates at 'critical point'
By: Chris Powell, Secretary/Treasurer, GATA - GoldSeek.com
Former Federal Reserve Chairman Paul Volcker today defended government intervention in the gold market to counter "exchange rate instability at a critical point."
Volcker's comments came in response to inquiry from the German freelance journalist Lars Schall, who noted GATA's reference to Volcker's expression of regret, recorded in his memoirs, about the failure of Western central banks to intervene to suppress gold prices during a currency revaluation in 1973. Volcker's support of gold price suppression was cited by your secretary/treasurer in his address to the Vancouver Resource Investment Conference last Saturday:

Continued soft U.S. monetary policy
already factored into gold prices
LONDON (Commodity Online): Continued soft U.S. monetary policy may have limited impact on Gold since it’s already factored into the market, said HSBC in a research note.
Members of the Federal Open Market Committee, which concludes a two-day meeting Wednesday, are expected to start releasing each member’s projections of the appropriate federal-funds rate at the end of 2012, 2013 and 2014, as well as what year the first rate hike should occur.

Bullish technical signals support silver and gold prices
By Dr Jeffrey Lewis - CommodityOnline.com
Several closely watched technical factors played a substantial role in precious metals trading last week as traders noted that increasingly bullish signals of an impending rally accumulated strength.
It is our conviction that ultimately the physical market will trump paper and drive technical traders, which in term will set-off the algorithm-funds, leading to significant moves higher or as we like to frame: a return to real equilibrium.

Gold Bonds: Averting Financial Armageddon
by Keith Weiner - Guest Post on ZeroHedge.com
After the near-collapse of the financial system in 2008, a growing number of people have come to realize that our monetary disease is terminal. It is that group to whom I address this paper. I sincerely hope that this group includes leaders in business, finance, and government.
I do not believe that my proposal herein is necessarily “realistic” (i.e. pragmatic). There are many interest groups that may oppose it for various reasons, based on their short-sighted desire to try to continue the status quo yet a while longer. Nevertheless, I feel that I must write and publish this paper. To say nothing in the face of the greatest financial calamity would go against everything I believe.

The Federal Reserve on gold and silver
By Nigam Arora - MarketWatch.com
The Federal Reserve does not directly comment on gold and silver. But for the first time in the living memory, the Fed sent a clear signal in a message about interest rates to sell them both.
However, market participants did not listen and ran the two up. After the 12:30 pm EST announcement from the Fed, the SPDR Gold Trust ETF and iShares Silver Trust, the Market Vectors Gold Miners ETF and popular miner stocks such as Newmont Mining Corp. , Barrick Gold Corp. Silver Wheaton Corp. saw explosive buying.

Has Bernanke Become A Gold Bug's Best Friend?
Submitted by Tyler Durden - ZeroHedge.com
Below we present the indexed return of ES (or stocks) and of gold over the past 24 hours since the Bernanke announcement of virtually infinite ZIRP, and the latent threat of QE3 any time the Russell 2000 has a downtick. It is unnecessary to point out just when Bernanke made it all too clear that the Fed has nothing left up its sleeve, expect to directly compete with the ECB over "whose (balance sheet) is bigger," as it is quite obvious. What is not so obvious, is that for all intents and purposes, Bernanke may have unwillingly, become a gold bug's best friend, as gold (and implicitly silver) has benefited substantially more that general risk. Much more. So for the sake of all gold bugs out there, could the Fed perhaps add a few more FOMC statements and press conferences? At this rate gold should be at well over $2000 by the June 20 FOMC meeting.

I Stand By $140 Silver In 2012
By Hubert Moolman - SilverSeek.com
There is a well-established relationship between how silver and gold trade. They often trade similar in the same time period, but also at similar milestones, although those milestones are sometimes reached at different times. This can cause silver or gold to be the leading indicator, depending on the particular milestone.

Broken Dollar
By Toby Connor, GoldScents - GoldSeek.com
It has been my theory that this year we would see one of the worst performances by the stock market since 2008. However that has always been dependent on Bernanke not being able to break the dollar's rally out of its three year cycle low. As of this morning the dollar has printed a failed daily cycle. More often than not a failed daily cycle is an indication that an intermediate degree decline has begun.

Angela Merkel casts doubt
on saving Greece from financial meltdown
German chancellor speaks candidly to the Guardian and five other leading European newspapers as part of a unique collaboration to explore the EU's predicament
By Ian Traynor - Guardian.co.uk
Angela Merkel has cast doubt for the first time on Europe's chances of saving Greece from financial meltdown and sovereign default, conceding that Europe's first ever multibillion euro bailout coupled with savage austerity was not working after a two-year crisis that has brought the single currency to the brink of unravelling.
In an interview with the Guardian and five other leading European newspapers, the German chancellor also insisted – against widespread resistance elsewhere in the eurozone and in the UK – that the European court of justice (ECJ) be empowered to police public spending and budget policies of the 17 countries in the euro.

Investors fear mounting losses
in Portugal as second rescue looms
Portugal is fighting a losing battle to contain its public debt and may be forced to impose haircuts of up to 50pc on private creditors, according to a top German institute.
By Ambrose Evans-Pritchard - Telegraph.co.uk
A report for the Kiel Institute for the World Economy said Portugal would have to run a primary budget surplus of over 11pc of GDP a year to prevent debt dynamics spiralling out of control, even in a benign scenario of 2pc annual growth.
"Portugal's debt is unsustainable. That is the only possible conclusion," said David Bencek, the co-author, warning that no country can achieve a primary budget surplus above 5pc for long.

How Will the Euro Crisis End?
Europe Can Beat This Crisis but Maybe Not the Next
By Clive Crook - Bloomberg.com
How gloomy should we be about the European Union? Are its problems manageable, or is it headed for systemic collapse? My answer is yes -- the problems are manageable, and the EU’s leaders are behaving so recklessly that collapse is all too possible. I don’t know whether that makes me an optimist or a pessimist.
The Peterson Institute for International Economics just hosted a debate about Europe’s prognosis. Four well-known economists, all deserving to be taken seriously, argued for and against the doomsday scenario. Let’s review their positions.

At Euro Talks, a Calm Arm-Twister From the U.S.
By ANNIE LOWREY - NYTimes.com
WASHINGTON — The world’s financiers and finance ministers have descended on the annual forum in Davos, Switzerland, at another perilous moment, with the sovereign debt woes in Europe sapping strength from emerging markets and threatening global growth.
Every nation’s rebound is at risk, including that of the United States — a particular concern for President Obama, who wants to trumpet the country’s renewed strength during his re-election campaign.

Between Various Rocks and Various Hard Places
BY CHARLES HUGH SMITH - FinancialSense.com
The U.S. and European economies are firmly between various rocks and various hard places.
Having stipulated that "Forecasting Is Not Humanity's Strength," I will not make any foolish forecasts that will assuredly be proven wrong, but it is undoubtedly true that the U.S. and Europe are both entering a "crunch time" politically and financially.
In essence, both economies are between multiple rocks and multiple hard places. Eventually, this ceases to be an academic question and becomes one of actual financial impact on people via higher taxes, smaller checks, lower purchasing power, etc.

Republicans Demand Block Of US IMF Funding
To Bail Out Europe
Submitted by Tyler Durden - ZeroHedge.com
In an odd coincidence, we were just updating the notional amount of FX swaps that the Fed has conducted with Europe in the past week, when we noticed that the GOP has finally made it an issue to fill in the gray area void of whether or not the US will be required to fund the IMF bailout of Europe. Tangentially, the Fed's USD swaps - an indicator of dollar-denominated last resort liquidity - just hit a 2012 high of $84.5 billion, increasing by $2 billion from the $82.5 billion in the prior week which makes us scratch our heads just how is it that Europe is "getting better" if instead of declining, usage of USD swaps is increasing confirming interbank liquidity is non-existence. This merely confirms that 4 weeks after peaking at a multi-year high of $85.4 billion in the last week of December, the European liquidity situation has once again started to deteriorate. It also means that the "self-reported" to the BBA 3M USD (but it's 'declining') is and continues to be about as worthless as any data out of the NAR.

QE3 May Be Preferred
Over Fed’s QE2 for Asia Economies Facing Export Slump
By Shamim Adam and Karl Lester M. Yap - Bloomberg.com
U.S. monetary stimulus, blamed in 2010 for spurring speculative capital flows to emerging markets, may find less opposition this time round in Asia as the region’s focus shifts to supporting economic growth.
Fed Chairman Ben S. Bernanke laid the groundwork for a third round of quantitative easing through asset purchases, a so-called QE3, saying two days ago the Fed is prepared for further "accommodation." Officials from China to South Korea were among those who criticized QE2, when they were raising interest rates in part to stem property and stock price surges.

America Has A $16.4 Trillion Debt Ceiling
In 52-44 Senate Vote
Submitted by Tyler Durden - ZeroHedge.com
Update: the Senate has failed to reject a bid to stop the debt ceiling hike with a simple 52 vote majority all of it along party lines. The US now has $16.4 trillion in debt capacity as of Friday. Since roughly $100 billion was plundered from Pension Funds in the past month, The US will have about $15.4 trillion in debt with the Monday DTS. The question then is how long will the $1 trillion in debt capacity last: at $125 billion/month it won't be enough to carry the US past the election without another massive debt ceiling spectacle.

Stephen Roach Explains
How The Fed Is Pulling The Wool Over Our Eyes
Submitted by Tyler Durden - ZeroHedge.com
"Bernanke is betting the ranch on open-ended QE and zero interest rates and it worries me" is how Stephen Roach of Morgan Stanley starts this must-see reality-check interview with Bloomberg TV's Tom Keene. The reason for his concern is simple, the current Fed modus operandi is a framework for rescuing economies in crisis but does little to sustain economic recovery. Roach agrees with Cal's Eichengreen that the European and US central banks are indeed in a policy trap, committed to a path of action that has to be perpetually ante'd up to maintain the dream. With Europe in recession already in his view, Roach does not expect the tough structural action until we see greater social unrest or overwhelming unemployment and reminds us of how close we got when Greece threatened the referendum in the late summer.

How much more spending was due to inflated prices...?
US growth expectations cemented by company spending
An increase in spending by US companies last month has cemented expectations that the world's largest economy accelerated in the final quarter of 2011.
By Richard Blackden - Telegraph.co.uk
Economists forecast that figures released on Friday will show US gross domestic product expanded at a 3pc annual rate in the fourth quarter, up from 1.8pc in the third.
Confidence in that prediction was lifted after a report torday showed that orders for durable goods, which include aircraft and computers, jumped a better-than-expected 3pc in December.

A Really Bad Plan for Reviving the Housing Market
Submitted by RickAckerman - ZeroHedge.com
For breathtakingly stupid political ideas and catastrophic “solutions” to America’s biggest problems, it’s hard to beat the New York Times op-ed page. There, joined by such jihadists of the Left as Frank Rich and Maureen Dowd, resides the peerlessly wrong-headed economist Paul Krugman, whose Nobel Prize was as well-deserved as the one Yasser Arafat received for helping to bring Peace to the world. Until yesterday, we might have thought Krugman had cornered the market for the absolute worst ideas on how to revive the economy. Here’s a guy who actually seems to believe, in his heart of hearts, that the reason this has not yet occurred is that the central banks of Europe, the U.S. and Japan have not thrown enough money at the problem. We stopped counting stimulus dollars and guarantees ourselves when the total hit $15 trillion a couple of years ago. That was long after we’d become convinced that deficit spending in such cosmic quantities, far from reviving the economy, would ultimately bury the U.S. in debt. As it has. Such concerns pose no problem for Krugman, however, since he simply avoids using the word “debt” in his Martian-friendly economic essays.

No More Résumés, Say Some Firms
By RACHEL EMMA SILVERMAN - WSJ.com
Union Square Ventures recently posted an opening for an investment analyst.
Instead of asking for résumés, the New York venture-capital firm—which has invested in Twitter, Foursquare, Zynga and other technology companies—asked applicants to send links representing their "Web presence," such as a Twitter account or Tumblr blog. Applicants also had to submit short videos demonstrating their interest in the position.
Union Square says its process nets better-quality candidates —especially for a venture-capital operation that invests heavily in the Internet and social-media—and the firm plans to use it going forward to fill analyst positions and other jobs.

Obama Plans to Propose
Corporate Tax System Overhaul Next Month
By Steven Sloan - Bloomberg.com
President Barack Obama will propose an overhaul of the U.S. corporate tax system in February, his economic advisers said.
The proposal will be released at about the same time as the administration’s fiscal 2013 budget plan, which is scheduled to be sent to Congress on Feb. 13. The administration isn’t releasing details of the comprehensive proposal, such as whether it will include a target for the top corporate tax rate.

Newt Gingrich: Our Bill Clinton
By R. Emmett Tyrrell - PatriotPost.us
WASHINGTON -- How long have I been saying it? At least for 15 years, but in private, I have been aware of it longer. Newt Gingrich is conservatism's Bill Clinton, but without the charm. He has acquired wit, but he has all the charm of barbed wire.
Newt and Bill are, of course, 1960s-generation narcissists, and they share the same problems: waywardness and deviancy. Newt, like Bill, has a proclivity for girl-hopping. It's not as egregious as Bill's, but then Newt is not as drop-dead beautiful. His public record is already besmeared with tawdry divorces, and there are private encounters with the fair sex that doubtless will come out. If I have heard of some, you can be sure the Democrats have heard of more.

Old mortgages rise from the dead, haunt homeowners
By Michelle Conlin
(Reuters) - In July 2009, Roy and Sheila Bowers refinanced the mortgage on their suburban ranch home in Topeka, Kansas. The couple wanted to take advantage of the low interest rates that were all the rage at the time.
Roy, a truck driver, and Sheila, a former hotel housekeeping supervisor, knew their new loan from Wells Fargo would enable them to save $198.86 a month - a nice chunk to help with gas and groceries.

Subprime Debt Insured by FHA Climbs
in Bet on Housing Recovery: Mortgages
By Kathleen M. Howley - Bloomberg.com
In Honolulu, on the southern coast of the island of Oahu, there’s a four-bedroom home priced at $785,000 that has views of the sun setting over the Pacific Ocean. The beaches of Waikiki are 15 minutes away.
Starting this month, the property is available to buyers with a subprime credit score, limited cash reserves and a 3.5 percent down payment using a loan backed by the Federal Housing Administration. Without the agency, a buyer would need a 20 percent down payment and an unblemished financial history for a jumbo mortgage.

Why Home Prices Have Much Further to Fall
BY LANCE ROBERTS - FinancialSense.com
There has been a deluge of articles recently about the upticks in the housing data. The consensus is that these data points are surely pointing, finally, to a bottom in the depressing decline of real estate. Let me acknowledge that I do not dispute the improvement in the data regarding home starts, permits, pending sales, etc., however, let's be clear that all of these data points are still mired at very depressed levels. So, while optimism is certainly always a welcome thing, for the average American, the world is quite different.

FBI to step up monitoring of social media sites
amid privacy concerns
Agency to build app that will constantly monitor Twitter and Facebook, following law enforcement trend of increased reliance
By Dominic Rushe in New York - Guardian.co.uk
The FBI plans to step up the monitoring of social networks like Facebook and Twitter, and has asked for help building an app to constantly monitor the sites.
Earlier this month the FBI quietly published a request for information (RFI) looking for companies that might help it build a new social network monitoring system looking at "publicly available" information. Contractors have until 10 February to suggest solutions.

Corruption scandal shakes Vatican as internal letters leaked
By Philip Pullella
(Reuters) - The Vatican was shaken by a corruption scandal Thursday after an Italian television investigation said a former top official had been transferred against his will after complaining about irregularities in awarding contracts.
The show "The Untouchables" on the respected private television network La 7 Wednesday night showed what it said were several letters that Archbishop Carlo Maria Vigano, who was then deputy-governor of Vatican City, sent to superiors, including Pope Benedict, in 2011 about the corruption.

Is Now The Time To Move Away From Major U.S. Cities?
EndOfTheAmericanDream.com
As the U.S. economy falls apart and as the world becomes increasingly unstable, more Americans than ever are becoming "preppers". It is estimated that there are at least two million preppers in the United States today, but nobody really knows. The truth is that it is hard to take a poll because a lot of preppers simply do not talk about their preparations. Your neighbor could be storing up food in the garage or in an extra bedroom and you might never even know it. An increasing number of Americans are convinced that we are on the verge of some really bad things happening. But will just storing up some extra food and supplies be enough? What is going to happen if we see widespread rioting in major U.S. cities like George Soros is predicting? What is going to happen if the economy totally falls to pieces and our city centers descend into anarchy like we saw in New Orleans during the aftermath of Hurricane Katrina? In some major U.S. cities such as Detroit, looting is already rampant. There are some sections of Detroit where entire blocks of houses are being slowly dismantled by thieves and stripped of anything valuable. Sadly, the economy is going to get a lot worse than it is at the moment. So is now the time to move away from major U.S. cities? Should preppers be seeking safer locations for themselves and their families? Those are legitimate questions.

Knowing Your Role as an Obedient Citizen
Joel Bowman - SilverBearCafe.com
Buenos Aires, Argentina – We can see them there, huddled under cover of night, assembled in the darkened corners of dimly-lit bars, conversing in hushed tones, eyes darting nervously, wondering who among them might turn coat. Which man here conceals a Ministry badge? Do I hide one myself? Dare I even ask?
How their hands do tremble. How their voices quiver, knowing that a second of free expression might cost the author his life. How shall we ever find our way home again, to the land of the free?

Weapons 'R' Us
By William J Astore - ATimes.com
Perhaps you've heard of Makin' Thunderbirds, a hard-bitten rock and roll song by Bob Seger that I listened to 30 years ago while in college. It's about auto workers back in 1955 who were "young and proud" to be making Ford Thunderbirds.
But in the early 1980s, Seger sings, "The plants have changed and you're lucky if you work." Seger caught the reality of an American manufacturing infrastructure that was seriously eroding as skilled and good-paying union jobs were cut or sent overseas, rarely to be seen again in these parts.

Do Israeli Leaders Really Think Iran Is an Existential Threat?
By Robert Wright - TheAtlantic.com
This Sunday's New York Times Magazine will feature a big piece, already available online, by the Israeli journalist Ronen Bergman called "Will Israel Attack Iran?" The first paragraph sets a dramatic scene featuring Israel's defense minister, Ehud Barak. As Sabbath eve approached two weeks ago, and Barak "gazed out at the lights of Tel Aviv," he said to Bergman, "This is not about some abstract concept, but a genuine concern. The Iranians are, after all, a nation whose leaders have set themselves a strategic goal of wiping Israel off the map."

Israel Senses Bluffing in Iran’s Threats of Retaliation
By ETHAN BRONNER - NYTimes.com
JERUSALEM — Israeli intelligence estimates, backed by academic studies, have cast doubt on the widespread assumption that a military strike on Iranian nuclear facilities would set off a catastrophic set of events like a regional conflagration, widespread acts of terrorism and sky-high oil prices.
The estimates, which have been largely adopted by the country’s most senior officials, conclude that the threat of Iranian retaliation is partly bluff. They are playing an important role inIsrael’s calculation of whether ultimately to strike Iran, or to try to persuade the United States to do so, even as Tehran faces tough new economic sanctions from the West.

US-Iran: A long game with pitfalls
By Kaveh L Afrasiabi - ATimes.com
A new report on United States-Iran strategic competition by the Washington think-tank Center For Strategic and International Studies (CSIS), focuses on the pros and cons of a "long game" between the two countries, centered on sanctions, arms control and regime change. [1]
Penned by Anthony Cordesman and Bradley Bosserman, the report provides useful information on the Iranian energy sector, presently subjected to tightening Western sanctions, predicting that despite the mounting pressures, Iran will not forfeit its controversial nuclear program for national security reasons. In fact, it has a decent chance of success in a protracted "long game", in light of similar successes by countries such as Pakistan, North Korea and India.

Sanctions aimed at averting wider conflict
By Barbara Slavin - ATimes.com
WASHINGTON - European countries are imposing unprecedented sanctions against Iran in part in hopes of preventing an Israeli attack on Iranian nuclear installations that could further destabilize the Middle East and wreak havoc on the global economy.
The decision on Monday by the European Union to phase out purchases of Iranian oil by July 1 is timed to US legislation that has the same deadline for sanctions against foreign banks that continue to do business with the Iranian central bank. However, European and US experts on Iran cite the fear of a new war as a key reason for the EU decision.

U.S. outrage as Egypt bars Americans from leaving
By Patrick Werr and Tom Perry
(Reuters) - Six Americans working for publicly funded U.S. organizations promoting democracy in Egypt have been barred from leaving the country, provoking angry demands in Washington that Cairo's new military rulers stop "endangering American lives".
Among those hit by travel bans - one of those targeted called it "de facto detention" - is a son of U.S. Transportation Secretary Ray LaHood, as well as other foreign staffers of the International Republican Institute and National Democratic Institute, officials at the two organizations said.

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Archived Page Link
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Thursday 01.26.2012

Gold ends atop $1,700; Fed extends low-rate pledge
Silver leads gains in metals,
ends at highest since mid-November
By Myra P. Saefong and V. Phani Kumar, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold prices finish sharply higher Wednesday, topping $1,700 an ounce, as the Federal Reserve’s monetary-policy committee extended its pledge to keep interest rates at exceptionally low levels till late 2014, which will help boost demand for the precious metal as an inflation hedge.
Silver futures led the percentage gains among the major metals, with prices settling at their highest since mid-November.

Silver is on the way to break $50/oz in 2012
Interview with David Morgan - CommodityOnline.com
Hard Assets Investor: Silver is starting out 2012 strongly. Is it following Gold or is it blazing its own path?
David Morgan: Silver is following gold, but if you study silver carefully, there are times when silver leads and gold lags.
A quick example was last year. We saw silver basically double from around the $25level to $48, in a matter of months. That ended about May 1. Gold did a similar parabolic move, but not quite the percentage gain that silver outlined, but it did it later in the year. So who went parabolic first, silver or gold? Well, in this case, silver did.

Paper Money Collapse
The Folly of Elastic Money and the Coming Monetary Breakdown
Detlev S Schlichter with James J Puplava - FinancialSense.com
All paper money systems in history have ended in failure. Either they collapsed in chaos, or society returned to commodity money before that could happen. Drawing upon novel new research, Paper Money Collapse conclusively illustrates why paper money systems—those based on an elastic and constantly expanding supply of money as opposed to a system of commodity money of essentially fixed supply—are inherently unstable and why they must lead to economic disintegration.

Peter Schiff, "Europe is the Warm Up,
but America is the Main Event"

Davos 2012: George Soros warns
'debt crisis could destroy European political union'
George Soros, the billionaire investor, has warned that the eurozone debt crisis could destroy European political union.
By Richard Fletcher - Telegraph.co.uk
"The measures introduced by the European Central Bank ... have relieved the liquidity problems of European banks but they did not cure the financing disadvantage from which the highly indebted member states suffer.
"Half a solution is not enough. It leaves the weaker members of the eurozone relegated to the status of third world countries that become highly indebted in a foreign currency," he added.
Germany he said was now acting as the "taskmaster", instead of the IMF imposing tough fiscal discipline.

George Soros Has Hard Words for European Union
By: Reported by Geoff Cutmore, Written by Ted Kemp - CNBC.com
Billionaire investor George Soros on Wednesday minced no words on the financial troubles faced by the Europe Union, as he addressed the future of the currency block before an audience in Davos.
Soros said that Europe is mired in a "spiral of decline" that reinforces itself, adding that, as things stand, "Weaker members of the euro zone are being left as Third World countries that borrowed in foreign currencies."

George Soros Talks of Economic Collapse in the West
BY ALEX NEWMAN - TheNewAmerican.com
Billionaire investor George Soros, infamous for his lavish funding of big-government and globalist causes, dropped several bombshells during a recent interview with Newsweekincluding a bold forecast of potential Western economic collapse, massive civil unrest, and the end of what he likes to paint as the "free market." He also sees the emergence of one of the most dangerous periods in modern history, describing it as a time of "evil."

George Soros remarks at the World Economic Forum, 2012

Davos Takes Lessons From China and Latin America
WEF speakers warned that as the West's crisis lingers, there is a risk that different models of capitalism, such as the form practiced in China, may win out
by Massoud Hayoun - TheAtlantic.com
A Modest Proposal to Solve Global Economic Woes: The China Model
Scrambling to boost the economy before the 2012 presidential elections, Obama has failed to explore one potential response to a recession that Davos experts are saying may last for years--a China-style economic dictatorship with free market tendencies.
China has come out of the global economic recession with a slowed growth rate, but remains relatively unscathed. Why? Beijing's one party has no heavy-handed congress through which it must pass legislation to recover the Chinese economy.

Will financial elite determine the future in Davos?

World Economic Forum in Switzerland:
Global Elites Celebrating Hypocrisy
BY BOB ADELMANN - TheNewAmerican.com
Global elites — many of the 2,500 of them billionaires — are spending a few days in Davos, Switzerland, attending the World Economic Forum (WEF), a group founded in 1971 "committed to improving the state of the world."
The state of the world doesn't appear too rosy. The recent downgrades of major economies, the clamor over perceived income inequality, the crisis in the eurozone, and other concerns are weighing heavily on the participants. Vikas Oberoi, chairman of India's second-largest real estate developer, observed, "Many who will be in Davos are the people being blamed for economic inequalities. I hope it’s not just about glamour and people having a big party." Azim Premji, chairman of India’s third-largest software company, was equally somber: "We have seen in 2011 what ignoring this aspect can result in. If we don’t take cognizance of it and try to solve this problem, it can create a chaotic upheaval globally."

IMF's Lagarde: combining ESM, EFSF would boost confidence
(Reuters) - IMF Managing Director Christine Lagarde said on Wednesday that combining the European Union's temporary EFSF rescue fund with its permanent ESM mechanism would help restore confidence in the flagging region and provide a solid firewall to the Greek crisis.
"If the two of them could make a common European pot, that would send a very strong sign of confidence in Europe," Lagarde told Europe 1 radio.
German Chancellor Angela Merkel has resisted calls to let the two funds to operate simultaneously, rather than allowing the ESM to replace the EFSF as originally planned. France is in favor of the measure.

IMF Urges ECB to Expand Its Balance Sheet to Tame Crisis
By Ian Talley - WSJ.com
The International Monetary Fund is urging the European Central Bank to expand its balance sheet as part of a multitrillion-dollar effort to tame the euro-zone debt crisis.
The IMF’s comments, made to the Group of 20 largest industrialized and developing economies, is a controversial call for stronger ECB intervention than the IMF has previously made public.
The IMF has said the ECB’s role has been essential in preventing a cascade of defaults and bank failures. It has said the central bank should continue its crisis-fighting efforts of providing cheap cash to the banking system and buying the bonds of ailing euro-zone countries to keep borrowing costs down until leadership is able to boost the size of its bailout facilities.

Marc Faber - Bloomberg Tv 22 Jan 2012

Roubini: Europe Needs 'Massive Monetary Easing'
By: Antonia Oprita - CNBC.com
Europe needs "massive monetary easing" to get out of its debt crisis, otherwise Greece will likely abandon the euro in a year and a half, famous economist Nouriel Roubini told CNBC on Wednesday.
Private creditors who lent Greece money, such as banks and investment funds, are meeting in Paris after talks on a debt swap that would change shorter maturity Greek bonds for longer maturity ones to give the country more chances to reduce its debt were inconclusive last week and earlier this week.

Greek Debt Talks to Resume in Athens
as Policy Makers Squabble on Haircut
By Nicholas Comfort and Sonia Sirletti - Bloomberg.com
Talks on a debt swap to avert a Greek default resume today as international policy makers squabble over the mounting cost of the rescue.
Charles Dallara and Jean Lemierre, negotiating on behalf of private creditors, return to Athens today after European finance ministers insisted bondholders take bigger losses on their Greek debt. TheInternational Monetary Fund further roiled the discussions by suggesting that public holders of Greek bonds might also have to increase support.

Angela Merkel defiant as IMF leads attack on Germany
German Chancellor Angela Merkel has defied calls for a radical shift in strategy to lift Europe out of crisis but is increasingly isolated as the International Monetary Fund and key global bodies join ranks to force her hand.
By Ambrose Evans-Pritchard and Louise Armitstead - Telegraph.co.uk
Mrs Merkel said it was folly to think that a deep problem built up over many years could be solved "at one fell swoop" and dismissed talk of doubling or tripling of the EU bail-out fund as senseless chatter.
"I ask myself, how long would that remain credible? What we don't want is a situation where we promise something we can't back up, because if markets then attack hard, Europe's flank really will be exposed," she told the World Economic Forum in Davos.

Croatia Votes to Join EU After Pensions Threatened
BY ALEX NEWMAN - TheNewAmerican.com
After an intense pro-European Union tax-funded lobbying campaign warning of disaster, Croatians voted by an almost two-to-one margin to join the troubled EU despite a debt crisis which threatens to sink the region’s single currency and an increasingly authoritarian tone emanating from Brussels.
The nation’s political class furiously prodded voters into backing membership in the supranational regime, threatening economic doom if voters rejected the bid. Foreign Minister Vesna Pusic, for example, said voting against the EU "would be like shooting yourself in the foot."

Mixed reviews for Obama speech among Davos mighty
By Ben Hirschler and Emma Thomasson
(Reuters) - The rich and powerful were divided at their annual huddle on Wednesday over Barack Obama's threat to raise their taxes, with some saying it could hurt growth, but others arguing he was right to address capitalism's imbalances.
Obama's State of the Union address focused on channeling middle class anger at inequality, including a call for a 30 percent minimum tax on millionaires that could make the wealth of Republican rival Mitt Romney a central election issue.

Jobs Are Biggest Issue of Next Decade: Pandit, Others
By: Catherine Boyle - CNBC.com
Employment is the most important issue facing the world over the next decade, Vikram Pandit, chief executive of Citigroup, along with the other co-chairs of the World Economic Forum, told journalists in Davos Wednesday.
The world needs 600 million new jobs in the next decade to cope with a rising population and the effects of the financial crisis, according to figures released earlier this week by the International Labor Organization.

Buffett: I'll Go $1 for $1 with GOP to Pay Down Debt
By BEN BERKOWITZ and DAVID LAWDER, Reuters - TheFiscaltimes.com
Warren Buffett is willing to put his money where his mouth is, if only congressional Republicans would join him.
The American billionaire investor, in the new issue of Time magazine, says he would donate $1 to paying down the national debt for every dollar donated by a Republican in Congress. The only exception is Senate Republican leader Mitch McConnell, for whom Buffett said he would go $3-to-$1.

Obama disconnected from the state of the union?

* * * * *

Geithner: I won't serve second term
By Peter Schroeder - TheHill.com
Treasury Secretary Timothy Geithner does not anticipate serving a second term under President Obama.
Geithner said in an interview with Bloomberg Television that he is "pretty confident" the president would not ask him to stay on if he is reelected.
"I'm confident he'll be president. But I'm also confident he's going to have the privilege of having another secretary of the Treasury," he said, adding that he planned to do "something else."

Geithner: Obama Wouldn’t Ask Me to Stay in a Second Term
By Cheyenne Hopkins and Trish Regan - Bloomberg.com
Treasury Secretary Timothy F. Geithner, the last remaining member of the Obama administration’s original economic team, said he doesn’t expect the president to ask him to stay in office if re-elected.
"He’s not going to ask me to stay on, I’m pretty confident," Geithner said in an interview with Bloomberg Television today. "I’m confident he’ll be president. But I’m also confident he’s going to have the privilege of having another secretary of the Treasury."

Geithner Says Europe’s Woes Tougher to Solve Than U.S. Crisis
By Ian Katz - Bloomberg.com
U.S. Treasury Secretary Timothy F. Geithner said Europe is "making some progress" in combating a financial crisis that’s more difficult to solve than what the U.S. faced in 2008.
"If you look back over the last three months or so, they are starting to engender more confidence," Geithner told business executives today in Charlotte, North Carolina. "They’re going to get their arms around this and contain it."

Who Is Dan Jester
And Why Did Tim Geithner Call Him 103 Times
During The Financial Meltdown Of 2008?
Geithner smiles but won't talk about mystery man, former Goldman Sachs executive turned lead Treasury AIG negotiator Dan Jester.
The Hank Paulson stories from earlier got me thinking again about Dan Jester. This piece by William Cohan is a good starting point. More coming.

Mystery Men of the Financial Crisis
By Lehman author William D. Cohan
Now that we have pulled back sufficiently far from the near "destruction of the modernfinancial system" — as the former Treasury Secretary Henry Paulson described the events of 2008 in his new memoir, "On The Brink" — to focus on how to prevent such a calamity from recurring, the time has come to hear from those players in the drama who really know what happened and why.

The State of Freedom in America - Judge Napolitano

What the State of the Union means for your wallet
By John Wasik
(Reuters) - While Americans might get a little break in their payroll taxes through the end of this year, greater financial relief for workers will be elusive. After the State of the Union speech by President Obama on Tuesday night, it's clear that the wizard will still be hiding behind the curtain.
The best evidence of this was when President Obama invoked the progressive intent of the proposed Buffett rule to tax millionaires at a minimum 30 percent rate marginal rate - about twice the effective rate that Mitt Romney, the GOP presidential candidate, has paid in recent years.

The True State of the American Union

The Real State of the Union

Bernanke: Long haul remains for recovery
By Peter Schroeder - TheHill.com
The Federal Reserve threw cold water on growing hopes that the economic recovery might be gaining momentum, indicating Wednesday that it expects the economy to take longer to get back on its feet.
The policy-setting arm of the central bank announced that it was pushing back, by a year and a half, how long it expects the economy to take before interest rates need to be increased from their near-zero levels. The Fed now expects it will keep those bottom-barrel rates until the end of 2014, up from the mid-2013 expectation of last year, as it struggles to "support a stronger economic recovery."

Is the United States in a Liquidity Trap?
Mises Daily: by Frank Shostak
....The Origin of the Liquidity-Trap Concept
In the popular framework of thinking that originates from the writings of John Maynard Keynes, economic activity is presented in terms of a circular flow of money. Thus, spending by one individual becomes part of the earnings of another individual, and spending by another individual becomes part of the first individual's earnings.
Recessions, according to Keynes, are a response to the fact that consumers — for some psychological reasons — have decided to cut down on their expenditure and raise their savings.

US Federal Reserve to keep interest rates near zero until 2014
Federal Reserve Bank's pessimism indicates the economy may not fully recover from the recession for another two years
By Dominic Rushe - Guardian.co.uk
The US Federal Reserve expects to keep short-term interest rates close to zero "at least through late 2014" – longer than previously indicated – chairman Ben Bernanke said as he expressed concerns about the pace of the recovery.
The decision means the Fed fears the economy will not fully recover from the recession that started in 2008 for at least another two years. "I don't think we're ready to declare that we've entered a new, stronger phase at this point. We'll continue to look at the data," Bernanke said at a press conference.

GOP prepares bill to replace
Obama's Supreme Court-bound healthcare law
By Sam Baker - TheHill.com
House Republicans will be ready with a plan to replace President Obama’s healthcare law once the Supreme Court determines the law’s fate this summer, Rep. Joe Pitts (R-Pa.) told reporters Wednesday.
Republicans have made good on their promise to try to repeal Obama’s healthcare law, but the "replace" part of their "repeal and replace" strategy has proved more difficult. Pitts said Republicans will be ready for the opening a Supreme Court ruling will provide — no matter what the justices decide.

Bird-Flu Virus Engineered in Wisconsin Lab
Isn’t Fatal, Scientist Says
By Molly Peterson - Bloomberg.com
An airborne strain of avian flu engineered in Wisconsin isn’t lethal and can be blocked with existing medicines, the study’s lead scientist said.
While the mutated virus was contagious among laboratory ferrets, it didn’t kill any of them, said Yoshihiro Kawaoka, a professor of virology at the University of Wisconsin at Madison. There’s an urgent need for more research on transmissible bird- flu strains, Kawaoka said in a commentary published online today in the Journal Nature.

Boeing faced with strong headwinds
Repeating stellar year will be tall task
By Tim Devaney-The Washington Times
Aerospace giant Boeing announced Wednesday it had posted its best year ever in 2011, but it faces a tough time repeating the performance in 2012.
The Chicago-based plane-maker announced a 20 percent increase in earnings and record revenue gains in 2011. Earnings per share improved to $5.34, up from $4.45 the previous year. Revenue from deliveries hit a record high of $68.7 billion, up from $64.3 billion in 2010 and $68.3 billion in 2009. The company also increased its backlog of future sales.

Boeing Financing May Get Government Boost Before Costs Rise
By Andrea Rothman - Bloomberg.com
Boeing Co. (BA) commercial aircraft financing may get more government backing in 2012 than last year as airlines rush to take advantage of funding costs that will rise in 2013, a senior executive said.
Kostya Zolotusky, managing director for leasing and capital markets at the Chicago-based company’s Boeing Capital Corp., said revised rules on the cost of getting loans backed by U.S. guarantees will go into effect in 2013, after the 2011 renegotiation of the Organization for Economic Cooperation and Development’s agreement on export credits for civil aircraft.

Indiana House Approves ‘Right to Work’ Measure
AP - NYTimes.com
INDIANAPOLIS (AP) — Indiana is poised to become the first right-to-work state in more than a decade after the Republican-controlled House passed legislation on Wednesday banning from collecting mandatory fees from workers.
It is yet another blow to organized labor in the heavily unionized Midwest, which is home to many of the country's manufacturing jobs. Wisconsin last year stripped public sector unions of collective bargaining rights.

Watchdog requests documents from Gingrich ethics probe
By Alicia M. Cohn - TheHill.com
Citizens for Responsibility and Ethics in Washington (CREW) filed requests on Wednesday seeking access to documents uncovered in an ethics investigation into former House Speaker Newt Gingrich that took place in the 1990s.
The group filed Freedom of Information Act (FOIA) requests with the Internal Revenue Service and the Department of Justice requesting access to any documents provided between 1996 and 1997 by the House Ethics Committee relating to the investigation.

Business giants take note of EU internet rights bill
BY NIKOLAJ NIELSEN - EUObserver.com
BRUSSELS - The EU commission has unveiled a single EU-wide law on internet privacy that could see overseas firms hit with multi-million-euro fines.
EU justice commissioner Viviane Reding told press at the launch event in Brussels on Wednesday (25 January) that "personal data is the currency of the digital market and it must be stable and trustworthy." She also called data protection "a fundamental right for all Europeans."
The draft regulation updates an old law from 1995 and comes at a time when 250 million EU citizens log on every day.

Newt Threatens China and Russia With Cyberwar
By Noah Shachtman - Wired.com
Newt Gingrich isn’t the only politician who’s freaked out by China and Russia’s online spying. But the new Republican presidential frontrunner may be the highest-profile political figure all but openly calling for cyberwar with Moscow and Beijing.
"I think that we have to treat state-based covert activities as the equivalent of acts of war," Gingrich said in response to a question about countries that target U.S. corporate and government information systems. "And I think that we have to respond to that and create a level of pain which teaches people not to do it."

America's New Strategy: Endless War(s)
By Robert Wright - TheAtlantic.com
Quick: How many countries was America at war with last year?
If you accept the old fashioned notion that to drop a bomb on a country is to be at war with it, the answer is, oh, half a dozen or so. As Peter W. Singer points out in a New York Times opinion piece, since the beginning of last year we've conducted drone strikes in six countries: Afghanistan, Pakistan, Iraq, Yemen, Somalia... and... and... well, Singer doesn't list them, so I'm not sure what the sixth one is.

EU sanctions on Iran peppered with exemptions
BY ANDREW RETTMAN - EUObserver.com
BRUSSELS - New sanctions on Iran could prove hard to enforce after EU countries peppered them with derogations to help Greece find alternate suppliers, to protect trade in non-oil sectors and to give Tehran-based embassies access to cash.
Details of the measures - designed to stop an alleged nuclear weapons programme - came out in the bloc's Official Journal on Tuesday (24 January).
The sanctions ban buying or shipping of crude oil, petrol and petro-chemical products, as well as supply of financial services, insurance, equipment and training for Iranian energy companies or the buying of new shares in energy firms.

How the U.S. and Iran
Keep Failing To Find a Peace They Both Want
A grand bargain would serve everyone, which is why both countries have tried to put aside tensions and strike a deal. So why are the U.S. and Iran perpetually stuck in confrontation?
By Trita Parsi - TheAtlantic.com
The 30-year-old U.S.-Iran enmity is no longer a phenomenon; it is an institution. For three decades, politicians and bureaucrats in both countries have made careers out of demonizing each other. Firebrands in Iran have won political points by adding an ideological dimension to an already rooted animosity. Shrewd politicians, in turn, have shamelessly used ideology to advance their political objec­tives. Neighboring states in the Persian Gulf and beyond have taken advantage of this estrangement, often kindling the flames of division.

War Abroad; Austerity at Home
by PAUL CRAIG ROBERTS - CounterPunch.com
The US government is so full of self-righteousness that it has become a caricature of hypocrisy. Leon Panetta, a former congressman who Obama appointed CIA director and now head of the Pentagon, just told the sailors on the USS Enterprise, an aircraft carrier, that the US is maintaining a fleet of 11 aircraft carriers in order to project sea power against Iran and to convince Iran that "it’s better for them to try to deal with us through diplomacy."
If it requires 11 aircraft carriers to deal with Iran, how many will Panetta need to project power against Russia and China? But to get on with the main point, Iran has been trying "to deal with us through diplomacy." The response from Washington has been belligerent threats of military attack, unfounded and irresponsible accusations that Iran is making a nuclear weapon, sanctions and an oil embargo. Washington’s accusations echo Israel’s and are contradicted by Washington’s own intelligence agencies and the International Atomic Energy Agency. Why doesn’t Washington respond to Iran in a civilized manner with diplomacy? Really, which of the two countries is the greatest threat to peace?

U.S. eyes expanded military role in Philippines
Philippines may allow
greater U.S. military presence in reaction to China’s rise
By Craig Whitlock - WashongtonPost.com
Two decades after evicting U.S. forces from their biggest base in the Pacific, the Philippines is in talks with the Obama administration about expanding the American military presence in the island nation, the latest in a series of strategic moves aimed at China.
Although negotiations are in the early stages, officials from both governments said they are favorably inclined toward a deal. They are scheduled to intensify the discussions Thursday and Friday in Washington before higher-level meetings in March. If an arrangement is reached, it would follow other recent agreements to base thousands of U.S. Marines in northern Australia and to station Navy warships in Singapore.

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Wednesday 01.25.2012

State of the Union 2012: Obama speech
White House

Text of President Obama’s State of the Union Address
Remarks of President Barack Obama – As Prepared for Delivery
State of the Union Address
"An America Built to Last"
Tuesday, January 24th, 2012
Washington, DC
As Prepared for Delivery –
Mr. Speaker, Mr. Vice President, members of Congress, distinguished guests, and fellow Americans:

Mitch Daniels Response To State Of The Union:
FULL TEXT: Republican Address to the Nation
Following is the full text of Gov. Mitch Daniels’ Republican Address to the Nation, as prepared for delivery:

In State of the Union,
Obama warns economic disparity threatens middle class
By Scott Wilson and David Nakamura - WashingtonPost.com
President Obama warned the nation Tuesday that the decades-old promise of a secure and rising middle class is under threat because of growing disparities between the rich and everyone else in America.
In an election-year State of the Union message that will likely serve as the template for the months of campaigning ahead, Obama outlined a series of steps that he believes will reinforce the tentative economic recovery, including proposals to eliminate tax incentives for companies to move jobs overseas, to make college more affordable and to expand help for credit-worthy homeowners looking to refinance mortgages at historically low interest rates.

Obama calls for economy 'built to last'
Vows to fight for middle class;
says Wall St. must play by the rules
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — President Barack Obama will use his State of the Union address Tuesday to describe specific plans to move toward an economy that is "built to last."
In excerpts of the speech released early by the White House, Obama said that the United States must attract "a new generation of high-tech manufacturing and high-paying jobs" to compete in the global economy.
The U.S. must also be "in control of our own energy," he said.
Following up on a speech the president gave in December in Kansas, Obama vowed to fight for the middle class.

State of the Union:
Obama to vow to 'fight obstruction with action'
By Michael A. Memoli - LATimes.com
Reporting from Washington— President Obama will vow to "fight obstruction with action" in his State of the Union address tonight, signaling the extent to which he will use an unpopular Congress as foil as he campaigns for a new term this year.
"As long as I'm president, I will work with anyone in this chamber to build on this momentum. But I intend to fight obstruction with action, and I will oppose any effort to return to the very same policies that brought on this economic crisis in the first place," Obama is expected to say this evening, according to advance excerpts of the address provided by theWhite House.

State of the Union:
Obama to say U.S. must reclaim fairness
By Ben Feller - AP - WashingtonTimes.com
WASHINGTON — Keeping the American dream alive has become "the defining issue of our time," President Barack Obama says. He’s using Tuesday night’s State of the Union address to draw a stark election-year line with Republicans over how to keep the United States from eroding further into a nation of haves and have-nots.
In excerpts of his speech released in advance,Obama attacked income equality and offered his own economic revival plan built upon boosting manufacturing, energy and education. He warned Republicans in Congress that he will fight them if they try to obstruct him or restore an economy gutted by "outsourcing, bad debt and phony financial profits."

Economic inequality a focus of Obama’s State of the Union
Denver Business Journal by Mark Harden
President Barack Obama hits themes of economic inequality and fairness in his State of the Union address Tuesday night, according to advance excerpts released by the White House.
"We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by. Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules," Obama’s speech text says.

India to pay gold instead of dollars for Iranian oil.
Oil and gold markets stunned
DEBKAfile Exclusive Report
India is the first buyer of Iranian oil to agree to pay for its purchases in gold instead of the US dollar, DEBKAfile's intelligence and Iranian sources report exclusively. Those sources expect China to follow suit. India and China take about one million barrels per day, or 40 percent of Iran's total exports of 2.5 million bpd. Both are superpowers in terms of gold assets.
By trading in gold, New Delhi and Beijing enable Tehran to bypass the upcoming freeze on its central bank's assets and the oil embargo which the European Union's foreign ministers agreed to impose Monday, Jan. 23. The EU currently buys around 20 percent of Iran's oil exports.

True or False: India to pay Iran in Gold for its oil
By Deepak Rangan - CommodityOnline.com
There are reports floating that India will be paying Iran in Goldinstead of the US Dollar for the oil imports. Though this might just make the goldbug in you to rush out and buy gold, we have to remember that this has not been confirmed-its only a rumour.
Israeli-based news website DEBKAfile reported that Iran and India are negotiating backup alternatives with China and Russia, should the US and EU find a way to block the gold payment mechanism.

Governments Will Want Much,
Much Higher Gold Prices Soon! Here’s Why
By: Arnold Bock
That governments will want - and will NEED - much, much higher gold and silver prices in the future is counter intuitive, given that they have done everything within their power till now to throttle back and to keep a lid on bullion prices. Let me explain why.
Although we have seen eleven consecutive years of gold bullion price rises, such increases have been incremental, measured and at levels which make the remainder of the commodities and equities markets look volatile. Governments have used their preferred bullion banks as agents in the paper futures markets and their central banks, in conjunction with their respective Treasury bureaucracies, to limit the inexorable rise in precious metals prices as much as possible to keep gold - the only ‘real money’ - from drawing unfavorable attention to their own failing fiat currencies and uncontrolled sovereign debt.

Governments Will Want Much,
Much Higher Gold Prices Soon! Here’s Why
BY ARNOLD BOCK - FinancialSense.com
That governments will want - and will need - much, much higher gold and silver prices in the future is counter intuitive, given that they have done everything within their power till now to throttle back and to keep a lid on bullion prices. Let me explain why.
Although we have seen eleven consecutive years of gold bullion price rises, such increases have been incremental, measured and at levels which make the remainder of the commodities and equities markets look volatile. Governments have used their preferred bullion banks as agents in the paper futures markets and their central banks, in conjunction with their respective Treasury bureaucracies, to limit the inexorable rise in precious metals prices as much as possible to keep gold - the only ‘real money’ - from drawing unfavorable attention to their own failing fiat currencies and uncontrolled sovereign debt.

"Absence of Far East Demand"
Sees Gold "Succumbs to Profit Taking"
as Markets "Fragile" on Greek Debt Uncertainty
By: Ben Traynor, BullionVault - GoldSeek.com
London Gold Market Report
WHOLESALE MARKET gold prices retreated to roughly where they started the week during Tuesday's morning session in London, making a 1% drop from yesterday's 6-week high to $1665 an ounce.
Silver prices slipped to $31.91 an ounce – a 1% drop on Friday's close – as stocks and commodities also fell following news that Greek debt agreement remains elusive after yesterday's Brussels finance ministers meeting.
"Key support [for gold prices] sits at the 200-day moving average, currently at $1643," says the latest report from Scotia Mocatta technical analyst Russell Browne.
"Gold succumbed to profit-taking yesterday," adds Marc Ground, commodities strategist at Standard Bank.

Central bank buying to be bulwark of gold rally
LONDON (Commodity Online): Central-bank purchases to be a bulwark of the long-term Gold rally, said HSBC in a research note.
According to bank, a World Gold Council report estimating that central-bank gold purchases may have hit 450 metric tons in 2011. This means the official sector outstripped gold exchange-traded-fund demand of 155 tons last year by almost threefold.
"The outlook for central-bank gold purchases remains positive for this year, based on the likelihood that emerging-markets central banks will continue to diversify away from the USD," HSBC said.

Silver sales are booming as supply drops to scary levels
By Steve St Angelo - CommodityOnline.com
For the first time in history, Silver Eagle & Maple Leaf sales will surpass domestic silver production in the U.S. and Canada in 2011
The demand for American Silver Eagles and Canadian Maple Leaf coins has increased tremendously over the past several years. 2011 will be the first year in which official coin sales will surpass domestic silver production in both countries.

Billionaires at Davos Bemoan Inequalities
By Matthew G. Miller - Bloomberg.com
Ukrainian billionaire Victor Pinchuk wants to talk about income inequality. So does Irish billionaire Denis O’Brien and Indian billionaire Vikas Oberoi.
The three are among a contingent of at least 70 billionaires who are joining more than 2,500 business and political leaders at the World Economic Forum’s annual meeting in Davos, Switzerland, this week, according to a list of attendees and promotional materials obtained by Bloomberg News. A half-dozen of the richest participants, interviewed in advance of the conference, say economic disparity needs to be addressed.

Billionaires at Davos Bemoan Inequalities
By Matthew G. Miller - Bloomberg.com
Ukrainian billionaire Victor Pinchuk wants to talk about income inequality. So does Irish billionaire Denis O’Brien and Indian billionaire Vikas Oberoi.
The three are among a contingent of at least 70 billionaires who are joining more than 2,500 business and political leaders at the World Economic Forum’s annual meeting in Davos, Switzerland, this week, according to a list of attendees and promotional materials obtained by Bloomberg News. A half-dozen of the richest participants, interviewed in advance of the conference, say economic disparity needs to be addressed.

IMF Cuts Global Forecast, Sees European Recession,
Warns Of 4% Economic Crunch If No Euroarea Action
Submitted by Tyler Durden - ZeroHedge.com
The latest IMF Global Financial Stability Report is out and it is not pretty. The IMF now sees:

• 2012 world growth outlook cut to 3.3% from 4.0%, 2013 growth revised lower to 3.9% from 4.5%
• 2012 US growth of 1.8%, 2013 at 2.2%
• 2012 UK growth of 0.6%, down from 1.6%
• 2012 China growth of 8.2%, down from 9.0%
• Eurozone to enter "mild" recession, whatever that is, with -0.5% economic growth, to grow again in 2013 by 0.8%. Unclear just how with all the deleveraging...

IMF also adds that without action, the debt crisis may force a 4% Euro-area contraction, in line with what the World Bank, controlled by a former Goldmanite, said. Lastly, the IMF says that Europe needs a larger firewall and bank deleveraging limits. Well there is always that €X trillion February 29 LTRO.

Why Isn't Illinois A Bigger Story Than Greece?
BY JOHN RUBINO - FinancialSense.com
As the Greek default (and it is a default no matter what they end up calling it) is finalized this week, the consensus seems to be that failure to reach a deal would cause a global financial apocalypse.
That may be true. And if it is, why aren’t we more worried about Illinois? It’s more or less the same size as Greece, its finances are in the same generally catastrophic shape, and its leaders are just as feckless and dishonest. It owes tens of billions of dollars to various investors and stakeholders and will clearly have to stiff many of them at some point. The following article captures the "failed state" dilemma perfectly:

EU ratchets up pressure with Greek default threat
European Union officials have stepped up pressure on Greece and its creditor banks in a complex game of three-way brinkmanship, signalling that they will allow a Greek default to run its course unless both sides accept more pain.
By Ambrose Evans-Pritchard - Telegraph.co.uk
Austria's finance minister Maria Fekter said patience with Athens is exhausted. "Greece has failed its austerity targets by a wide margin. The Greeks have made decisions, but they weren't implemented. They have agreed to austerity measures, but costs haven't come down. This situation has caused great consternation," she said at a meeting of EU finance minister in Brussels.
"We're sending a direct message to Greece that the community expects more. We're not pleased and only when there's a written message on the table in front of us, can further assistance be discussed," she said.

Greek Economy on Track to Implode: Hanke
By Austen Sherman and Sara Eisen - Bloomberg.com
Whether or not Greece is able to reach an agreement on the restructuring of its debt, the country is set to "implode" as the economy contracts, according to Johns Hopkins University’s Steve Hanke.
"The game is completely over," Hanke, professor of applied economics, said at the Bloomberg Sovereign Debt Crisis Conference in New York hosted by Bloomberg Link. "All the calculations are nonsense and have been since day one. Since the crisis began the money supply has been shrinking and the economy is going to implode, no matter what they do in the short run."

EU ministers agree new bail-out fund, criticise Greece
BY VALENTINA POP - EUObserver.com
BRUSSELS - EU finance ministers have overcome Finnish objections to a permanent bail-out fund for the eurozone, access to which will be made conditional on signing a new treaty on fiscal discipline.
"We were able to agree on a text of the revised treaty concerning the European Stability Mechanism," Chair of the meeting Luxembourg Prime Minister Jean-Claude Juncker told a press conference late Monday night (23 January).

Professor Edward Altman:
The Final Battle for the Euro Will Be Fought on Italy’s Shores
Latest Z-Score Test Shows Credit Conditions Have Worsened
James J Puplava CFP with Edward Altman PhD - Podcast
FinancialSense.com

Hungary risks losing EU funds, ministers say
BY VALENTINA POP - EUObserver.com
BRUSSELS - EU finance ministers on Tuesday (24 January) warned Hungary it may lose EU funds if it fails to fix ts excessive deficit, a problem since 2004.
"Hungary cannot face sanctions under the excessive deficit procedure as it is not a member of the euro area. But for beneficiaries of the EU's cohesion fund, such as Hungary, failure to comply with the Council's recommendations can lead to the suspension of cohesion fund commitments," the ministers said in their conclusions on Tuesday.

IMF sees rising recession risk from euro credit crisis
By Howard Schneider - WashingtonPost.com
The global economy is slowing sharply and is at far greater risk of recession than was thought just months ago with Europe’s debt crisis creating "fertile ground" for a rapid collapse, the International Monetary Fund warned on Tuesday.
In a sobering trio of reports on growth, public debt and financial stability, the agency described global trade and investment as waning and depicted the world as perhaps one shock away from a serious downturn. The epicenter of the economic turmoil remains the euro zone, where political leaders have not committed the money needed to prop up weakened governments and banks, thereby threatening to create a cycle of "self-perpetuating pessimism" that could undermine the recovery, the IMF said.

Europe at war with Iran
By Pepe Escobar - ATimes.com
No one ever lost money betting on the foolishness of European Union (EU) politicos. And if you are an oil trader, rejoice - all the way to the bank; as expected, EU foreign ministers - meekly following the Barack Obama administration - have given a green light for a full Iranian oil embargo.
The embargo applies not only to new contracts but also existing contracts - to be voided by July 1, and includes extra sanctions targeting Iran's central bank and petrochemical exports to the EU.
It's always crucial to remember the embargo - a de facto European declaration of economic war - was forcefully proposed in the first place by the neo-Napoleonic "liberator" of Libya, France's President Nicolas Sarkozy. The official EU excuse for the economic war is "serious and deepening concerns over the Iranian nuclear program".

Short 10 Year US treasury: Goldman Sachs
NEW YORK (Commodity Online): Goldman's Francesco Garzarelli has officially told the firm's clients to go ahead and short 10 Year Treasurys via March 2012 futures, with a 126-00 target. The fact that Goldman is now openly buying Treasurys two days ahead of this week's FOMC statement makes us wonder just how much of a rates positive statement will the Fed make on Wednesday.

Meet the new Federal Reserve members
By Annalyn Censky @CNNMoney
NEW YORK (CNNMoney) -- It's a new year. And that means a new, and probably less divided, Fed.
The Federal Reserve is playing its annual game of musical chairs, rotating voting members on its policymaking committee.
While the Fed board of governors and the president of the New York Federal Reserve always have votes, the other Fed presidents take turns serving on the committee.
This time around, the rotation brings on four voting members who are likely to be a far less contentious group than the four they are replacing.

Sheikhs fall in love with renminbi
By M K Bhadrakumar - ATimes.com
China and Qatar have been taking virtually opposite positions apropos events in Libya and Syria. Yet, they do not seem to be deterred by this little difference and are bonding in a big way in economic cooperation to mutual benefit.
Chinese Prime Minister Wen Jiabao, who visited Doha last week, disclosed at a press conference on Friday: a) China proposes to invest in the manufacturing of ''downstream oil products, which are most urgently needed by Qatar''; b) China and Qatar signed an agreement to jointly build a refinery in Taizhou, Zheijiang, in China; c) Chinese companies propose to participate in infrastructure projects in Qatar; and d) China and Qatar are discussing a "long-term, stable and comprehensive cooperative partnership" in natural gas.

Art Cashin On "Calamity Joe" Granville
And A January 23 Market Top
Submitted by Tyler Durden - ZeroHedge.com
The Chairman of the Fermentation Committee takes the fizz out of the market once again.
From UBS Financial Services
Calamity Joe Is Back - Last week, we wrote that various cycles and technicians were pointing to a possible market top, on or about January 23rd. The “causes” ranged from sophisticated oscillators to the new moon to astrological confluences. Yesterday, one more “cause” was added and it came from a somewhat controversial Wall Street legend - Joe Granville. Here’s a bit from a Bloomberg review of Mr. G’s call:
Joseph Granville, whose "sell everything" call in 1981 sparked a decline in U.S. stocks, said the Dow Jones Industrial Average (INDU) will drop toward 8,000 this year because of waning momentum and volume.

THE SUMMERS MEMO
Posted by Ryan Lizza - NewYorker.com
In a piece this week on Barack Obama’s shift from idealism to pragmatism, I describe an important fifty-seven-page document from Lawrence Summers to President-elect Barack Obama dated December 15, 2008:

Marked "Sensitive and Confidential," the document, which has never been made public, presents Obama with the scale of the crisis. "The economic outlook is grim and deteriorating rapidly," it said. The U.S. economy had lost two million jobs that year; without a government response, it would lose four million more in the next year. Unemployment would rise above nine per cent unless a significant stimulus plan was passed. The estimates were getting worse by the day.

George Soros on the Coming U.S. Class War
The situation is about as serious and difficult as I've experienced in my career.
By John Arlidge - TheDailyBeast.com
You know George Soros. He’s the investor’s investor—the man who still holds the record for making more money in a single day’s trading than anyone. He pocketed $1 billion betting against the British pound on "Black Wednesday" in 1992, when sterling lost 20 percent of its value in less than 24 hours and crashed out of the European exchange-rate mechanism. No wonder Brits call him, with a mix of awe and annoyance, "the man who broke the Bank of England."
Soros doesn’t make small bets on anything. Beyond the markets, he has plowed billions of dollars of his own money into promoting political freedom inEastern Europe and other causes. He bet against theBush White House, becoming a hate magnet for the right that persists to this day. So, as Soros and the world’s movers once again converge on Davos, Switzerland, for the World Economic Forum this week, what is one of the world’s highest-stakes economic gamblers betting on now?

What exactly would President Obama do in a second term?
By JOHN F. HARRIS and CARRIE BUDOFF BROWN | Politico.com
Take this quiz: If President Barack Obama wins a second term, he has promised that he will do … what exactly?
There are people who follow the president closely who couldn’t answer that question. And even those who try would surely find themselves disagreeing with one another.
As he stands before the nation Tuesday evening to present his State of the Union address, Obama is a president whose positions may be well-known but whose agenda — what he actually intends and can reasonably expect to achieve if voters give him four more years — is blurry.

Romney: I wouldn't pay taxes under Newt plan
By ALEXANDER BURNS | Politico.com
Hours before he plans to release his 2010 tax returns, Mitt Romney noted at the GOP debate in Tampa that under his opponent’s tax plan, he wouldn’t have paid any taxes at all.
The moment came after Newt Gingrich joked about Romney’s 15 percent tax rate, saying: "I’m prepared to describe my flat tax as the Mitt Romney flat tax."
Romney jumped in to ask: Do you tax capital gains at 15 percent or zero percent?
Gingrich’s answer: Zero.
"Under that plan, I’d have paid no taxes in the last two years," Romney said, alluding to the fact that all his income is from investments.

US Post Office Needs to Cut 260,000 Jobs: Rep. Issa
By: Jeff Cox - CNBC.com
The U.S. Postal Service needs to slash 260,000 jobs and end weekend delivery if it is to climb out of its "financially insolvent" condition, Rep. Darrell Issa said.
Despite a mandate to avoid deficits, the post office loses up to $15 billion a year, Issa told CNBC during an informal gathering of senior House Oversight and Government Reform Committee members.

America's great divide between rich and poor
By Stephen Lendman - Pravda.ru
In 1962, Michael Harrington's "The Other America" exposed the nation's dark side, saying:
"In morality and in justice, every citizen should be committed to abolishing the other America, for it is intolerable that the richest nation in human history should allow such needless suffering."
"But more than that, if we solve the problem of the other America we will have learned how to solve the problems of all of America."
Jack Kennedy was concerned enough to ask Walter Heller, his Council of Economic Advisor chairman, to examine the problem.
In his January 8, 1964 State of the Union address, poverty levels also got Lyndon Johnson to say his administration "today, here and now, declares unconditional war on poverty in America."
In fact, he barely scratched it. However, he got Congress to enact measures helping America's poor.
Inequality then was severe. Today, it's unprecedented and growing. Wealthy elites are richer than ever. Census data show around half of US households impoverished or bordering on it.

Obama Puppetmaster Warren Buffett
Biggest Winner From Keystone Pipeline Rejection
Submitted by Tyler Durden - ZeroHedge.com
Just when one thinks American crony capitalism couldn't hit new lows, here comes Warren Buffett and his personal puppet, the president, proving everyone wrong once more. Because if one thinks there is no (s)quid pro quo for all that "sage" advice that Buffett has been giving to Obama on extracting as much wealth as possible from future wealthy Americans (before they decide they have had enough with this crony shit and leave the country for good), one would be fatally wrong.

Buffett would profit from Keystone cancellation
By Dave Boyer-The Washington Times
Warren Buffett, whom President Obama likes to cite as a fair-minded billionaire while arguing for higher taxes on the wealthy, stands to benefit from the president’s decision to reject the Keystone XL oil pipeline permit.
Mr. Buffett’s Berkshire Hathaway Inc. ownsBurlington Northern Santa Fe LLC, which is among the railroads that would transport oil produced in western Canada if the pipeline isn’t built.

Wells Fargo economist says 'true' housing recovery
could be decade away
San Francisco Business Times by Mark Calvey
Wells Fargo Securities says a national housing rebound could take a decade to arrive despite recent data suggesting an improvement in housing.
"While home prices may finally reach a bottom on 2012, prices will likely not rebound nationally in a significant way anytime soon, so long as vacancy levels remain elevated," Mark Vitner, senior economist at Wells Fargo Securities, told clients in a 12-page special report this month. (Wells Fargo Securities is an arm of San Francisco-based Wells Fargo, (NYSE: WFC) the nation’s largest mortgage lender.

Fannie, Freddie writedowns too costly: Regulator
Reuters - ChicagoTribune.com
The regulator for Fannie Mae and Freddie Mactold lawmakers that forcing the two mortgage firms to write down loan principal would require more than $100 billion in fresh taxpayer funds.
In a letter sent on Friday to the Republican and Democratic leaders of a U.S. House of Representatives government oversight panel, the Federal Housing Finance Agency explained why it has long opposed principal reductions for borrowers who owe more than their homes are worth.

Searching for the Bottom in Home Prices
by Charles Hugh Smith - CollapseNet.com
A substantial percentage of many households' net worth is comprised of the equity in their home. With the beating home prices have taken since 2007, existing and soon-to-be homeowners are keen to know: Are prices stabilizing? Will they begin to recover from here? Or is the "knife" still falling?
To understand where housing prices are headed, we need to understand what drives them in the first place: policy, perception, and price discovery.
In my December 2011 look at housing, I examined systemic factors such as employment and demographics that represent ongoing structural impediments to the much-awaited recovery in housing valuations and sales. This time around, we're going to consider policy factors that influence the housing market.

INTERNATIONAL PHYSICIANS’ GROUP
CALLS FOR HALT TO WIRELESS SMART METERS
Organization tells CPUC that smart meters pose health risks, especially for children
EastCountyMagazine.org
January 24, 2012 (San Diego)--The American Academy of Environmental Medicine (AAEM) has become the first national physicians’ group to adopt a resolution calling for a halt to wireless smart meters.
The group sent a resolution to the California Public Utilities Commission opposing smart meters due to health risks and calling on the CPUC to take preventative actions to protect the public health.
The letter notes that medical literature has raised “credible questions about genetic and cellular effects, hormonal effects, male fertility, blood/brain barrier damage and increased risk of certain types of cancers” from radio frequency levels emitted by smart meters. “Children are placed at particular risk for altered brain development, and impaired learning and behavior. Further EMF/RF adds synergistic effects to the damage observed from a range of toxic chemicals,” the international doctors’ organization concluded.

Total Federalization of Police
Under New Homeland Security Mission
Mission Creep: DHS Agency Abandons Fighting Terrorism,
Shifts to Hiring Police, Taking Over America
By Aaron Dykes - Infowars.com
A new white paper presented to the House Permanent Select Committee on Intelligence carves out an 'evolving mission' for Homeland Security that moves away from fighting terrorism and towards growing a vast domestic intelligence apparatus that would expand integration with local/state agencies and private-public partnerships already underway via regional fusion centers.
Crafted by the Aspen Institute Homeland Security Group, co-chaired by former DHS chief Michael Chertoff and composed of a who’s who of national security figures, the report outlines a total mission creep, as the title "Homeland Security and Intelligence: Next Steps in Evolving the Mission" implies.

Ageing Japan faces 'chronic' trade deficit after Fukushima
Japan has racked up its first trade deficit in 31 years as the country's ageing crisis hits home and the Fukushima nuclear disaster raises dependence on imported fuel.
By Ambrose Evans-Pritchard - Telegraph.co.uk
The darkening picture has set off deep soul-searching about the sustainability of the nation's Japan's economic model, and ultimately the trajectory of its 1,010 trillion yen (£8.3 trillion) public debt.
Official data to be released overnight is expected to show the country ran a deficit of about $24bn (£15.4bn) in 2011, and has been running a structural shortfall of $3bn a month since the tsunami shut down most of Japan's nuclear industry.

Iran: Closing Hormuz Strait to Deal With EU's Embargo?
By: Yousef Gamal El-Din - CNBC Anchor
Iranian authorities have reacted to the decision by the European Union on an embargo by calling for an immediate halt to oil sales to the continent. In a statement on its website, the Iranian Oil Ministry described the European Union’s decision as "hasty" and "a political game".
But a spokesman for the parliament’s energy committee also told the semi-official Fars news agency that the country still saw the closure of the Strait of Hormuz as one of the strategies to deal with an oil embargo.

U.S. military in Persian Gulf still necessary, welcome force
By Rowan Scarborough-The Washington Times
The U.S. is maintaining a sizable ground, air and sea force in the Persian Gulf, underscoring the need to protect oil-producing states after deposing Iraqi strongman Saddam Hussein and exiting a democratic Iraq in December.
U.S. Central Command, which oversees the region’s American military commitment, would not provide details about troop strength and placement, or the number of Air Force strike aircraft and Navy warships in the Gulf.

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Tuesday 01.24.2012

A U.S. Sovereign Debt Crisis?
Author: Jonathan Masters, Associate Staff Writer - CFR.org
Fiscal policy is set to take center stage in Washington this week as Congress prepares for its conference committee on the payroll tax cut extension (The Hill), and the Senate votes on the contentious issue of raising the debt ceiling (FoxNews) again. The U.S. national debt recently topped $15.23 trillion (USAToday), roughly equal to the size of the entire economy, and has raised fears among some that the country is marching headlong into a debt crisis akin to that of some nations in the eurozone.

Gordon Chang: Inflation nudging Chinese to buy more gold
By Daniela Cambone - CommodityOnline.com
Vancouver (Kitco News) -- Surging Chinese Gold imports reflect increased wealth but it also may be the result of consumer fears that inflation is higher than the government admits, according to an author who contends there are dark days ahead for the country.
In an interview on the sidelines of the Vancouver Resource Investment Conference here, Gordon Chang said China may be on the edge of serious economic slowdowns and said gold purchases may mirror some of the fears of the populace. Chang was also a speaker at the conference, which is sponsored by Cambridge House International.

There will be a run on gold
stored in the US by European countries
NEW YORK (Commodity Online): There would be a run,by European countries, on the Gold they have stored at the New York Fed, said Jim Sinclair in an interview with KWN.
When asked him if the IMF would be selling any gold:
"No. The role of gold has changed and gold is moving more toward the central bank then away from it. On top of that you have seen a significant amount of media attention towards, ‘Where is our gold?’ This is taking place in the European press."

Why Gold at $6000/oz before 2014
By Hubert Moolman
If the current Gold bull market was to follow the timing and extent of the 70s bull market, the gold price would reach $6000 before 2014. See charts below.

Silver: An amazing rise in price
By Tim Iacono - CommodityOnline.com
A stronger euro and a weaker dollar have worked wonders for the once-thought-dead Gold bull market and Silver turned in its most impressive weekly performance in almost three months as the world continues to marvel at the surging demand for precious metals in China, a trend that could accelerate as policy makers there shift from fighting inflation to spurring growth.
For the week, spot gold rose 1.7 percent, from $1,639.70 an ounce to $1,667.00, as silver surged over the $30 an ounce mark, rising 8.2 percent from $29.77 an ounce to $32.20. Gold is now up 6.4 percent for the year, but down 13.3 percent from its high last summer, while the silver price is up 15.6 percent in 2012 but remains 34.9 percent below its early-2011 peak.

Silver to shoot up from $32 to $58-60/oz by September 2012
By Peter Cooper
Pop down to the Old Gold Souk in Deira, part of the modern city of Dubai and the hottest selling item is a 1kg bar of Silverthese days. Ejaz Ilyas, director of Karachi Jewellers said in an interview, they are selling 600 to 700 of these $1,300 bars each month with a 4.1 per cent profit margin.
Silver is more profitable than gold
'It is far more profitable to trade silver than gold where the margin is much smaller,' said Ejaz Ilyas.
'We get a lot of passing tourists who buy 1kg silver bars. I was born in Dubai and spent most of my professional life in London but business is better here now. Even a modest shop in this souk does well.'

Gold outperformed majority of assets in 2011: WGC
NEW YORK (Commodity Online): The year 2011 turned out to be another positive year for the yellow metal, marking the 11th consecutive year of price increases, according to World Gold Council (WGC).
After a tumultuous year in financial markets around the world, gold was one of few asset classes to deliver positive returns . WGC said that gold outperformed a large majority of assets, including oil, on a risk-adjusted basis during a year of marked uncertainty and increased volatility. It performed its role as a vehicle for diversification and risk management.

Max Keiser - Warren Pollock predicts a Bank Holiday soon

What Is 'Stable Value' In Currency Terms?
By Nathan Lewis, Contributor - Forbes.com
The reason that we use gold, in a gold standard system, instead of, say, orange juice, is because we are trying to accomplish a goal, and gold is the best way to do so. Our goal is to create a currency of stable value.
"Why do you use titanium to build a nuclear submarine?" one could ask. "Why not copper? Or ‘pork bellies’? Isn’t it completely arbitrary? A mere superstition?" These people always think they are very sophisticated.

Gerald Celente on Trend Forecasting
and the Crisis of Western Civilization
TheDailyBell.com - interview with Gerald Celente
....Daily Bell: Okay. Here are some more trends questions ... some subjects, in no particular order. Give us some trends feedback, please. In other words, put them into economic and sociopolitical context for our readers. First one, the West – where are we headed?
Gerald Celente: The West is headed to dictatorship. It's already happening. The merger of state and corporate power is by definition called fascism. I just mentioned the Defense Authorization Act. Before you had that you had the abrogation of the Constitution under Bush, with the Patriot Act, which Obama reinstated and made even tougher by signing this bill. When I say the merger of state and corporate powers, look at the $16.1 trillion that the Federal Reserve has funneled into businesses around the world. Whatever happened to that thing called capitalism? This is not capitalism; it's fascism! The more societies break down and the bigger the screw-ups at the top, the harder they clamp down on the bottom. You see it going on around the world; they call it austerity measures. How about calling it enslavement?

Dodging a Bullet, from a Machine Gun
BY JOHN HUSSMAN PHD - FinancialSense.com
Leading economic evidence continues to teeter at levels that have always and only been breached in recessions, but the sharp deterioration we initially observed late last year has been followed by modest stabilization - though still near the area that has historically marked the entry to economic contraction. The uncertain outcome and the incomplete view evoke a line from Leon Russell - "I'm up on a tightwire, one side's ice and one is fire... but the top hat on my head is all you see."

If The U.S. Government Keeps Spending Money Like This We Are Doomed And If The U.S. Government Stops Spending Money Like This We Are Doomed
TheEconomicCollapseBlog.com
If you increased your credit card spending by a couple thousand dollars per month would your lifestyle improve? Of course it would. By going into large amounts of debt, it is possible to live a lifestyle that you can't really afford, at least for a while. But if you keep racking up huge amounts of credit card debt every single month, eventually it gets to a point where it is extremely difficult to even keep up with the minimum monthly payments and the credit card companies will not lend you any more money. Well, on a larger scale it is the same thing with government debt. Right now, the U.S. government is spending more than a trillion dollars more than it takes in every year. Even if the U.S. government spends all of that money on incredibly stupid stuff, it still gets into the pockets of ordinary Americans.

Iran’s currency tumbles to new record low
Citizens scramble for gold
NowLebanon.com
The Iranian currency, the rial, tumbled Monday in black market trading to a new record low against the dollar, news agencies said, as the EU moved to impose an oil embargo and fresh sanctions on Tehran.
The unofficial rate in central Tehran was around 20,500 rials to the dollar, the official IRNA news agency reported.
The rate showed a 12-percent rise for the US currency since last Wednesday when it was changing hands at 18,000 rials on the black market.

Americans Are Deleveraging, But Not Because They Want To
Submitted by Tyler Durden - ZeroHedge.com
As comparisons between US and European debt to GDP levels and the finger-pointing of who is deleveraging more continues, McKinsey notes (in their quarterly Debt and Deleveraging article) that there may be a light at the end of the tunnel for the US as private-sector deleveraging has been rapid since 2008. However, reading on a little, we find that the light at the end of the tunnel may well be the front of the oncoming train of financial distress as some two-thirds of the 4% ($584bn) in US household debt deleveraging is from defaults on home-loans (and other consumer debt)! Of course, with homebuilder stock prices surging (notably rather dramatically relative to lumber or ABS/CMBS), consensus has once again agreed that the bottom in housing is in. McKinsey's initial forecast that the pent-up foreclosures and implicit deleveraging will bring us back to trend by 2013 seems like a pipe-dream and we tend to agree with their more conservative perspective that reversion in household debt will not be to trend but to pre-credit-bubble levels, implying a 22% further reduction (or a couple more trillion dollars of defaults).

Staring into the Abyss
BY JOHN MAULDIN - FinancialSense.com
....Europe's leaders are committed to keeping both the euro and the eurozone as it is. But for it to do so, everything must change, as the wonderful quote from the 1958 Italian novel suggests. This is no easy task, as no one wants a change that will impact them negatively; and there is no change that will allow things to stay the same that does not impact all severely, as we will see. In the third part of a continuing series, we look at the actual options that are available on the menu of choices, or as one group called it, the menu of pain. I offer some guideposts that we should watch for along the way, and end by offering a suggestion as to what Europe should do. As has been the case in this series, I do my best to offend everyone at some point. If by some small, unintended oversight I do not, then wait another week, I will get to you. What else are friends for?

Goldman Says U.S. Data Look Better Than They Are: Economy
By Bob Willis - Bloomberg.com
A decline in unemployment and pickup in manufacturing point to accelerating U.S. growth. Some economists say the numbers may not be as good as they look.
One reason: the severity of the economy’s plunge in late 2008 and early 2009 after Lehman Brothers Holdings Inc. collapsed threw a wrench into models used to smooth the data for seasonal changes, according to analysts at Goldman Sachs Group Inc. and Nomura Securities International Inc.

Marc Faber - CNBC 8 Interview - 19 Jan 2012

Things That Make You Go Hmmm...
BY GRANT WILLIAMS - FinancialSense.com
It's no secret that the U.S. is completely unable to withstand higher interest rates and so, to maintain low rates, they have chosen to go down the path of Quantitative Easing or, to use the vernacular, moneyprinting. As a consequence, there are multiple trillions of dollars of freshly printed money currently waiting to be unleashed into the wild ($1.6 trln alone just sitting on deposit at the Fed in return for 0.25% interest).

Warning: QE3 is coming in March
NEW YORK (Commodity Online): For the politicians, Europe is a potential fiscal nuclear device that needs to be disarmed. According to a recent article by Al Field posted at www.24hgold.com, if just 10% of euro interest rate derivatives produce losses, it could cost the world banking system $22 trillion. That is enough to effectively bankrupt it.
This is one black swan that could well make a crash landing... and soon. You can bet none of this has been lost on the U.S. Federal Reserve either.

Fed likely to hint of no rate increase before 2014
By Martin Crutsinger - AP - WashingtonTimes.com
WASHINGTON — It could be quite a while yet before the Federal Reserve starts raising the interest rates it’s kept at record lows for three years.
Maybe not before 2014.
That’s the thinking of many analysts as the Fedprepares this week to provide more explicit clues about how long short-term rates will likely stay near zero.
Starting when their policy meeting ends Wednesday, Fed members plan to forecast the direction of those rates four times a year. The clearer guidance will accompany the Fed’s usual quarterly predictions of growth, unemployment and inflation.

Federal Reserve to disclose more details
on plans for low interest rates
By Zachary A. Goldfarb - WashingtonPost.com
The Federal Reserve, which took aggressive action in response to the U.S. financial crisis and more recently to help keep European banks in good health, has been divided for months over whether to take major new actions to bolster the nation’s slow economic recovery.
Instead, at its first meeting of the year this week, the Fed is planning to take a more incremental step: disclosing more detail about its plans to keep interest rates low for at least the next year and a half.

Obama to Use Pension Funds
of Ordinary Americans
to Pay for Bank Mortgage "Settlement"
by Yves Smith - NakedCapitalism.com
Obama’s latest housing market chicanery should come as no surprise. As we discuss below, he will use the State of the Union address to announce a mortgage “settlement” by Federal regulators, and at least some state attorneys general. It’s yet another gambit designed to generate a campaign talking point while making the underlying problem worse.
The president seems to labor under the misapprehension that crimes by members of the elite must be swept under the rug because prosecuting them would destablize the system. What he misses is that we are well past the point where coverups will work, and they may even blow up before the November elections. If nothing else, his settlement pact has a non-trivial Constitutional problem which the Republicans, if they are smart, will use to undermine the deal and discredit the Administration.

NYSE-Deutsche Boerse
Said to Lack Support to Overturn EU’s Takeover Veto
By Aoife White and Nandini Sukumar - Bloomberg.com
NYSE Euronext (NRX) and Deutsche Boerse (DB1) AG are unlikely to garner enough support from European Union commissioners to overturn a looming veto over their plan to create the world’s largest exchange, according to four people familiar with the situation.
The EU’s antitrust chief, Joaquin Almunia, won’t face significant opposition from other EU commissioners to his proposal to block the deal at a Feb. 1 meeting, said the people who can’t be identified because the discussions aren’t public. The European Commission, the EU’s executive arm, is led by 27 commissioners drawn from each of the bloc’s member states. They must jointly approve EU decisions.

Germany, France press for rapid Greek debt deal
By Jan Strupczewski and Andreas Rinke
(Reuters) - Euro zone finance ministers Monday rejected as insufficient an offer made by private bondholders to help restructure Greece's debts, sending negotiators back to the drawing board and raising the threat of Greek default.
At a meeting in Brussels, ministers said they could not accept bondholders' demands for a coupon of four percent on new, longer-dated bonds that are expected be issued in exchange for their existing Greek holdings.

Germany Proposes Combining Rescue Funds
By James G. Neuger and Brian Parkin - Bloomberg.com
Germany floated the idea of combining Europe’s two rescue funds, in a concession to bolster the fight against the fiscal crisis as Greece bargained with bondholders over debt relief.
Germany may be open to boosting the combined aid limit from 500 billion euros ($651 billion) when a permanent fund runs alongside the temporary fund starting in July, government officials in Berlin said. The need for a beefed-up fund was dramatized by haggling between Greece, the trigger of the two- year-old crisis, and its creditors over debt reduction to stave off default.

DEBT LIMIT - (parody)
A GUIDE TO AMERICAN FEDERAL DEBT MADE EASY.

Debt-Driven Doldrums or the Promise of Prosperity:
America at a Crossroads
Speaker: Rob Portman, U.S. Senator, Member, Joint Select Committee on Deficit Reduction
Presider: Stephen Friedman, Chairman, Stone Point Capital
CFR.org
....SENATOR ROB PORTMAN (R-OH): (Applause.) Steve, thank you very much.
What Steve didn't mention is that I was one of those members of Congress that always came up to the White House when Steve was the director of the National Economic Council to give him advice and counsel, which he acted like he actually listened to sometimes. And it was great having Steve there. He was a breath of fresh air, both because he brought that private-sector experience and because of his style. You know, he woke up every morning, when he was in that job -- which is a tough job -- trying to figure out what was best to grow our economy, and never considering partisan advantage and never considering extraneous issues. So he served President Bush well during that first term.

Stunning: Elitists Are Planning on Taking Down Capitalism
by Robert Wenzel - LewRockwell.com
This is very serious. The elitist power grab is going right at the heart of capitalism. Of course, they have always been for central control, with them in control, but now they are calling out capitalism, directly. as an inferior product.
On Friday, I attacked Larry Summers for blaming the current crisis on capitalism. I thought he was a lone wolf attempting to see how far the anti-capitalist agenda could be pushed. I was wrong.
It appears Summers simply fired the first shot in a new aggressive move by elitists to discredit capitalism outright. The elitists are gathering in Davos, Switzerland right now for the 2012 World Economic Forum.

Corzine Sued for RICO Violation by MF Global Customers
By Linda Sandler - BusinessWeek.com
Jan. 20 (Bloomberg) -- Jon Corzine, MF Global Holdings Ltd.’s former chief executive officer, was sued under U.S. racketeering law by commodity customers alleging he and other executives “unlawfully” took money from their accounts and failed to segregate their money as the law requires.
The suit alleges that hundreds of millions of dollars were transferred from customers’ accounts to other MF Global units, at a time when the company was short of cash and faced calls for collateral as its risky Eurobond and other investments fell in value.

USA Today Gives JP Morgan Free Pass
By Greg Hunter’s USAWatchdog.com
Last week, I saw an interview in USA Today with JP Morgan Chase CEO Jamie Dimon. Maria Bartiromo of CNBC was the reporter; so, I am not surprised to see a very soft ball story. I don’t know what you would call this kind of reporting, but it’s not journalism. To me, it’s a PR piece for Dimon and JP Morgan. USA Today gave a sloppy wet kiss and a free pass to Dimon to say whatever makes the bank look good. When asked about how his industry was "demonized," Dimon said, “What I would hope for: that there is no so-called pressure in the industry. That we had rational collaboration about how to build a great country with great rules and regulations that allow business to thrive. If business doesn’t thrive, it hurts America.” (Click here for the complete PR interview from USA Today.) In other words, if we don’t thrive, you don’t thrive. So, don’t even think about punishing us.

Gerald Celente - Brian Wilson WSPD 18 January 2012

How the Great Recession
and the Slow Recovery Compare Historically
By Paul Swartz and Neil Bouhan - TheAtlantic.com
The following charts provide a series of answers, plotting current indicators (in red) against the average of all post-World War II recoveries (in blue). The x-axis shows the number of months since the end of the recession. The dotted lines are composites of prior recoveries representing the weakest and strongest experiences of the past. The recovery's start date is set using the recession dates established by the National Bureau of Economic Research's Business Cycle Dating Committee. By the committee's methodology, the current recovery began in June 2009. Despite some bright news recently, the pictures underline the economy's weakness since that date.

Top Justice officials linked to mortgage banks
Pressure rises on Justice to open wide-ranging probe of mortgage servicers -- Reuters - MSNBC.MSN.com
U.S. Attorney General Eric Holder and Lanny Breuer, head of the Justice Department's criminal division, were partners for years at a Washington law firm that represented a Who's Who of big banks and other companies at the center of alleged foreclosure fraud, a Reuters inquiry shows.
The firm, Covington & Burling, is one of Washington's biggest white shoe law firms. Law professors and other federal ethics experts said that federal conflict of interest rules required Holder and Breuer to recuse themselves from any Justice Department decisions relating to law firm clients they personally had done work for.

U.S Cities going broke and for sale

Home buying could soon beat renting
By John W. Schoen, Senior Producer - MSNBC.com
Falling home prices have sent many would-be buyers to the sidelines. If all goes well, record low interest rates and rising rents may soon prompt some of them to take a second look at buying.
Unfortunately, that's a big "if," according to Paul Diggle, a housing economist at Capital Economics.
Much of the decision to buy a house still depends on your personal finances and preferences, your career or family life, or level of financial security.
But if you’re comparing just the cost of owning and renting, buying a house may soon be the better choice, according to Diggle.

* * * * *

If The TSA Will Treat Senator Rand Paul Like A Scumbag,
What Will They Do TO YOU?
EndOfTheAmericanDream.com
On Monday, U.S. Senator Rand Paul was detained by the TSA for about two hours at an airport in Nashville. By doing so, TSA officials directly violated the U.S. Constitution and they demonstrated once again why the rest of the world is coming to regard us as a bunch of disgusting, arrogant "pig people". Do we really want to get such a bad reputation that virtually nobody will ever want to visit this country? We are going to absolutely destroy our tourism industry with this nonsense. Yes, we all want to fly safely, but other countries get the job done without their security officials running around acting like a bunch of Nazi prison guards. The TSA should be shut down, but if Congress wants it to continue to exist it should be given a dual mandate. It should be directed to protect the dignity of the American people first, and the safety of the American people second. If those running the TSA don't believe that this is possible, then they should be immediately replaced, because there are a whole lot of good people out there that could get the job done. Right now, TSA officials are treating American citizens like they aren't even human. The truth is that Rand Paul got off easy compared to what has happened to many other Americans. As I have written about previously, some elderly Americans have been strip-searched, some have had their adult diapers removed, and some have even been left covered in urine by invasive TSA searches. If the TSA will treat Senator Rand Paul like a scumbag, and if they will brutally strip-search elderly women, than what do you think they are going to do to you when the time comes?

Rand Paul Detained by TSA

Ron Paul Slams "Out Of Control Police State"
After Rand Paul Detained By TSA
Congressman renews his call to abolish agency that "gropes and grabs" Americans
By Steve Watson - Infowars.com
GOP presidential candidate Ron Paul issued the following statement on his campaign website this afternoon, following his son Rand’s treatment at the hands of the TSA in Nashville.

"The police state in this country is growing out of control. One of the ultimate embodiments of this is the TSA that gropes and grabs our children, our seniors, and our loved ones and neighbors with disabilities. The TSA does all of this while doing nothing to keep us safe.
"That is why my ‘Plan to Restore America,’ in additional to cutting $1 trillion dollars in federal spending in one year, eliminates the TSA.

Senator Paul refuses airport patdown after alarm
By Thomas Ferraro and John Crawley
(Reuters) - Republican Senator Rand Paul was stopped at an airport on Monday for setting off an alarm and refusing a patdown, prompting his father, U.S. presidential candidate Ron Paul, to accuse security officials of being part of an "out of control" police state.
In a harshly worded attack on the Transportation Security Administration, which handles security screenings at U.S. airports, Ron Paul, known for his strident libertarian views, said the TSA "gropes and grabs our kids and our seniors and does nothing to keep us safe."

Sen. Rand Paul Questions Invasive TSA Searches - 06/22/11

TSA Directly Violated US Constitution
By Detaining Senator Rand Paul
By Steve Watson - Infowars.com
In preventing Kentucky Senator Rand Paul from flying to Washington this morning, the TSA directly violated the law as written in the US Constitution.
The Constitution specifically protects federal lawmakers from being detained while en route to Washington DC.
Article I, Section 6 states:
"The Senators and Representatives…shall in all Cases, except Treason, Felony and Breach of the Peace, be privileged from Arrest during their Attendance at the Session of their respective Houses, and in going to and returning from the same…."

America After Dark:
Desperate Meth Heads, Rampant Human Trafficking
And Millions Of Criminal Predators Searching For A New Victim
TheEconomicCollapseBlog.com
When the sun goes down every night, America becomes a very frightening place. There are communities all over the country where drug dealing, human trafficking and gang violence have gotten so out of control that authorities don't really know what to do about it. In America tonight, thousands of meth heads will break into homes as they desperately search for enough money for another hit. In America tonight, thousands of children will be sold for sex at truck stops and on street corners. In America tonight, millions of criminal predators will be searching for a new victim. From the top levels of the federal government all the way down to the most depraved criminals on the street, America is rotting. Once upon a time our tremendous affluence masked the moral decay that was happening in this nation, but now that the economy is falling apart the damage to the fabric of our society is being revealed. We have become a nation of addicts, junkies, thrill seekers and predators. When we finally see the U.S. economy fully collapse, millions of desperate, angry and depraved monsters will take out their sick frustrations on all the rest of us.

Why Apple says it can't build an iPhone in the US
It's not just about cheap labor — flexibility in staffing, supply chains and reconfiguring factories matter
By CHARLES DUHIGG and KEITH BRADSHER, NYTimes - MSNBC.MSN.com
When Barack Obama joined Silicon Valley’s top luminaries for dinner in California last February, each guest was asked to come with a question for the president.
But as Steven P. Jobs of Apple spoke, President Obama interrupted with an inquiry of his own: what would it take to make iPhones in the United States?

Who Buys All Those Google Ads?
An Infographic Breakdown
By John C Abell - Wired.com
Google cleared $37.9 billion in 2011 revenue, which equates to more than $3 billion a month, mostly from those little text ads next to your search results that neither you or anybody you know will admit to ever clicking on.
Insurance and finance buys for Google Adsense words accounted for $4.2 billion of that total — more than 10 percent — according to Larry Kim, the founder of Wordstream, a company that sells software to analyze text ad campaigns and commissioned the infographic above. The most expensive search term in that niche was "Self employed health insurance" — not surprising in the aftermath of the recession and the Affordable Care Act, which will eventually require nearly everyone to have health care insurance (unless the Supreme Court nullifies the law later this year).

US and China engaged in a new arms race?

U.S. lauds EU for embargo on Iranian crude oil
Move could spur rise in gas prices
By Guy Taylor-The Washington Times
U.S. leaders praised the European Union’s embargo on Iranian oil Monday, even though it triggered a jump of more than $1 per barrel in global oil prices and signaled the potential for a rise in U.S. gasoline prices in the weeks ahead.
Iranian officials called the embargo an act of "psychological warfare," and lawmakers renewed threats to block the Persian Gulf’s Strait of Hormuz, through which one-fifth of the world’s crude oil is transported.

How Iran May Trigger Accidental Armageddon
By Jeffrey Goldberg - Bloomberg.com
One of the arguments often made in favor of bombing Iran to cripple its nuclear program is this: The mullahs in Tehran are madmen who believe it is their consecrated duty to destroy the perfidious Zionist entity (which is to say, Israel) and so are building nuclear weapons to launch at Tel Aviv at the first favorable moment.
It’s beyond a doubt that the Iranian regime would like to bring about the destruction of Israel. However, the mullahs are also cynics and men determined, more than anything, to maintain their hold on absolute power.

What Will Happen With Iran?
BY JR NYQUIST - FinancialSense.com
Will there be a war in the Persian Gulf in 2012? Will America provoke Iran, or secretly encourage an Israeli attack? There is a way to answer these questions with a high degree of confidence.
For the last several years there has been a persistent rumor that Washington plans to preemptively strike Iran (to prevent Iran from becoming a nuclear power). Despite all the hand-wringing, no attack has occurred – and for good reason. The United States learned a hard lesson after the invasion of Iraq. War is expensive and the path to victory is not easy. Furthermore, there are economic consequences for attacking Iran; namely, higher oil prices.

Gerald Celente - Coast to Coast AM - 18 January 2012

Update on Fukushima
Submitted by George Washington - ZeroHedge.com
FUKUSHIMA RADIATION SPREADS WORLDWIDE
The University of California at Berkeley detected cesium levels in San Francisco area milk above over EPA limits … and even higher than they were 6 months ago.
Finnish public television says that cesium from Fukushima has been detected in lichens, fungi and elk and reindeer meat in Finland.
The Australian Radiation Protection and Nuclear Safety Agency confirmed a radiation cloud over the East Coast of Australia.
The West Coast of Canada is getting hit by debris from Japan … and at least some of it is likely radioactive.

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Monday 01.23.2012

Gold: higher prices are coming
CommodityOnline.com
While it is early to determine if the ongoing breakout is finally in anticipation of upcoming episodes of direct and indirect monetization by the Fed, ECB, or any of the many other pathological currency diluters in circulation, it is obvious that precious metals have found a new bid in recent days. Is this then, the beginning of the next surge in Gold and Silver to record highs? It remains to be seen, but one entity, the Duet Commodities Fund which was one of last year's best performers, has already made up its mind. 'Our central forecast in gold remains constructive as our long term view targets $2,500 in 2012. Our core view is that gold will head higher to the $2,500 range driven by consequential USD weakness once the EU crisis dissipates and the US steps into the limelight.

Is new gold standard a realistic option?
By Ross Norman - CommodityOnline.com
There was a time when politicians kissed babies to show they had the common touch and a real connection with ordinary folk. With the outcome of the US elections finely poised, Goldand a return to a gold standard is seen as a potential vote-winner - today they are embracing gold, not babies.
In South Carolina 33% of voters are gold standard supporters, with 18% warm to the idea while only 11% are against and 6% cool on the proposal. Gold is a clear 3-1 vote winner.

Gold Outlook 2012
BY NICK BARISHEFF - FinancialSense.com
Good afternoon, it’s a pleasure to speak about gold at this Outlook for 2012.
Today, I’d like to focus on one important idea: the direct relationship between the rising price of gold and the rising levels of government debt that result in currency debasement. Since we measure investment performance in currencies a clear understanding of the outlook for currencies is critical.
In order to understand gold’s relationship, it’s important to understand that gold is money. It is not simply an industrial commodity like copper, or zinc. It trades on the currency desks of most major banks—not on their commodities desks. The turnover at the London Bullion Market Association is over $37 billion per day, and volume is estimated at 5-7 times that amount – clearly, this is not jewelry demand.

Why Wall Street wants $2000 gold this year
By Q Brown - CommodityOnline.com
There is always a certain level of speculation involved when trying to predict whether Gold prices will rise or fall in any given calendar year. Historical charts for the last few years wouldLead you to believe that gold prices will continue to increase. But there are a host of factors outside the traditional "supply and demand". Market factors play a greater role in price fluctuations than in years past.

Can the government confiscate your gold and silver?
By Doyle Shuler - CommodityOnline.com
Even if you can get a good price of precious metals, are you concerned that our government can confiscate your Goldsome day? After all, gold Silver prices are one thing, but if you build up your gold and silver holdings, what's the use if the government is just going to come in and take it from you anyway?
Currently there are thousands of new gold and silver buyers coming into the market every week. Unfortunately many of them are non sophisticated buyers and can easily get sold a bill of goods if they are not really careful, and educated, before buying precious metals.

Gold Confiscation, a Reality? Part III
By: Julian D. W. Phillips - GoldSeek.com
The issues facing the developed world’s financial systems are ones of liquidity and solvency, among others. The assumptions of liquidity levels proved horribly incorrect! The request of the IMF to lift their resources from $380 billion to $980 billion and the currency swaps between the U.S. and Eurozone confirm that (these may still prove inadequate). Many markets, which reserve managers had considered to be deep and liquid, proved to be the exact opposite with assets-selling only at a large discount. This was even true of some AAA-rated assets, showing that credit ratings offered no effective guide to liquidity. Many central banks had to rely on bi-lateral currency agreements with other central banks, principally the US Federal Reserve.

Gold may remain bullish, but don't rule out silver in 2012
NEW YORK (Commodity Online): Gold may remain bullish in 2012, but don't rule out Silver and keep an eye on stocks for good value investments, says David Skarica, editor of The Gold Stock Adviser.
According to David Skarica, the United States will likely roll out more extraordinarily loose monetary policies such as quantitative easing, not solely due to necessity, but also to keep the dollar competitive with a weaker euro.

Regulators shut down small banks in Georgia, Florida, Pennsylvania; first failures of 2012
AP - WashingtonPost.com
WASHINGTON — Regulators have closed small banks in Georgia, Florida and Pennsylvania, the first failures of 2012 following 92 closures last year.
The number of closures in 2011 marked a sharp decline from the two previous years, as banks worked their way through the bad debt accumulated in the recession. And by this time last year, regulators had shuttered seven banks.

Topping Dollar Likely Catalyst for Gold Breakout
BY CHRIS PUPLAVA - FinancialSense.com
There are many moving parts to the gold story, all displaying varying degrees of influence over time given the ever-changing nature of correlations. What appears to have had the strongest affect on the price of gold over the last six months has been the USD and open interest in gold futures, while negative real interest rates have had no correlation. Although trends in speculative interest for gold (open interest) are difficult to forecast, it is far easier to predict trend changes in the USD. With that in mind, the dollar appears to be forming an intermediate-term top, which would have bullish implications for the price of gold ahead.

Inflation: The Only Tool Left
By: Jim Willie CB - GoldSeek.com
Any perusal around the world these days features Southern Europe crippled, preparing for the inevitable Greek Govt Bond default. It features a crippled US housing market, a mockery of statistical accounting in the US Gross Domestic Product, the plight of the COMEX with established veterans clearing out desks (not trading), the extreme physical demand reported by the London Trader, and the indictment of the SLV iTrust Silver Fund tool used by the cartel. The survey does not look favorable toward stability. The banking, economic, and political leaders have not pursued reform and remedy in any remote sense. Their only tool left is hyper inflation. The central banks of the Western nations have coordinated Global Quantitative Easing, as the USFed concealed its own QE3. Operation Twist was an enormous ruse, to cover the grand disposal sale (dump) by USGovt creditors and maintain a semblance of stability in the USTreasury market. The global financial crisis continues for a simple reason. No financial reform or remedy has been attempted, only bank-owned bond redemption and colossal aid to the financial sector that controls government ministries and law enforcement.

Davos elites to seek reforms of 'outdated' capitalism
AFP - Breitbart.com
Economic and political elites meeting this week at the Swiss resort of Davos will be asked to urgently find ways to reform a capitalist system that has been described as "outdated and crumbling."
"We have a general morality gap, we are over-leveraged, we have neglected to invest in the future, we have undermined social coherence, and we are in danger of completely losing the confidence of future generations," said Klaus Schwab, host and founder of the annual World Economic Forum.

The Global Elite Are Hiding 18 Trillion Dollars In Offshore Banks
TheEconomicCollapseBlog.com
In recent days, the fact that Mitt Romney has millions of dollars parked down in the Cayman Islands has made headlines all over the world. But when it comes to offshore banking, what Mitt Romney is doing is small potatoes. The truth is that the global elite are hiding an almost unbelievable amount of money in offshore banks. According to shocking research done by the IMF, the global elite are holding a total of18 trillion dollars in offshore banks. And that figure does not even count any money being held in Switzerland. That is a staggering amount of money. Keep in mind that U.S. GDP in 2010 was only 14.58 trillion dollars. So why do the global elite go to such trouble to hide their money in offshore banks? Well, there are two main reasons. One is privacy and the other is low taxation. Privacy is a big issue for those that are involved in illegal enterprises such as drug running, but the biggest reason why people move money into offshore banks is in order to avoid taxes. Some set up bank accounts in foreign nations because they want to legally minimize their taxes and others set up bank accounts in foreign nations because they want to illegally avoid taxes. You would be absolutely amazed at what some large corporations and wealthy individuals do to get out of paying taxes. Unfortunately, the vast majority of the rest of us don't have the resources or the knowledge to play these games, so we get taxed into oblivion.

WEF calls for action to stem crisis ahead of Davos
The World Economic Forum has called for short term action to restore confidence in financial institutions and stem financial contagion ahead of its annual conference in Davos.
By Richard Fletcher - Telegraph.co.uk
Warning that the "world face significant and urgent challenges that weigh heavily on prospects for future growth and on the cohesion of societies", the WEF's global issues group calls on world leaders to deliver "concrete actions".
Leaders should build on the "solid foundation" of the action plan for growth agreed at last November's G20 and develop a more comprehensive plan that could be agreed and implemented at June's G20 summit in Mexico.

Eurozone burns money
while the banks fiddle their balance sheets
'Nothing is safe that does not show it can bear discussion and publicity."
By Liam Halligan - Telegraph.co.uk
These words, among the many pearls uttered by the celebrated 19th century historian Lord Acton, have often come to me in recent years as the sub-prime crisis has unfolded. They've been particularly on my mind over the past week or so as I've watched events in the eurozone.
Investor sentiment in Western Europe appears to have improved over the past few days. In the aftermath of last weekend's French sovereign downgrade, financial markets have staged a counter-intuitive rally, with European equities reaching a five-month high on Thursday.

The IMF is no longer serving its purpose
To save the eurozone, the International Monetary Fund needs to dispense tough love, not endless bail-outs.
By Jeremy Warner - Telgraph.co.uk
If the International Monetary Fund did not exist, it would surely have to be invented. Its medicine is often harsh and frequently criticised, but as lender of last resort to countries that temporarily find themselves shut out of financial markets, its purpose is noble and necessary.
In no other field has international co-operation worked as successfully in addressing global problems as it has through the offices of the IMF. The world would undoubtedly be a more chaotic place without it. Just lately, however, its credibility has been endangered as rarely before. Something has gone very badly wrong, and the international consensus on which the organisation is based is fracturing.

Greek debt talks stall over interest rate on bonds
Crucial talks between Greece and private creditors on debt restructuring stalled over the weekend, with a dispute over the interest rate to be paid on new bonds.
By Ambrose Evans-Pritchard - Telegraph.co.uk
Negotiators from the International Institute for Finance representing banks and other creditors left Athens after a marathon session ended in the small hours of Saturday without a breakthrough, though talks continued by telephone.
Sources close to the dispute said there is little danger that the IIF will walk out and precipitate the first sovereign default in western Europe since the Second World War.

Greek Debt-Swap Deal 'Coming Into Place' IIF’s Dallara Says
Marcus Bensasson, Natalie Weeks and Maria Petrakis - Washpost.Bloomberg.com
Jan. 22 (Bloomberg) -- Greece and its private creditors said they had made progress during talks in Athens on a debt- swap accord needed to lower the country’s borrowings and clear the way for a second round of international aid.
"The elements of an unprecedented voluntary private-sector involvement are coming into place," according to an e-mailed statement early yesterday from Charles Dallara, managing director of the Institute of International Finance, a Washington-based lobby group representing creditors negotiating with the government.

European Banks May Deepen
Their Dependence on Unlimited Central Bank Loans
By Liam Vaughan and Gavin Finch - Bloomberg.com
European banks, shunned by investors and each other, may borrow as much next month from the European Central Bank as they did in a record offering in December as they seek refuge from frozen funding markets.
The ECB last month lent banks an unprecedented 489 billion euros ($630 billion) for three years. Analysts said they expect demand to be just as high at a second auction on Feb. 29 because the stigma associated with using the facility is dissipating and the list of what assets can be used as collateral in exchange for the loans will be extended. ECB PresidentMario Draghi said last week he expects demand for loans next month to be "still very high," though "probably lower than in December."

Italy and Spain call for eurozone rescue fund booster
Political leaders in Italy and Spain have called for a massive boost to the EU rescue fund and a blast of monetary stimulus by the European Central Bank (ECB), putting them on a collision course with Germany over the handling of the eurozone crisis.
By Ambrose Evans-Pritchard - Telegraph.co.uk
Italy's premier Mario Monti has told Berlin that the new European Stability Mechanism (ESM) must be doubled to €1 trillion (£828bn) to restore investor confidence in southern European debt, according to Der Spiegel.
The move comes days after Mr Monti warned German Chancellor Angela Merkel that austerity fatigue is growing in the debtor states and there will be a "powerful backlash" unless the creditor powers led by Germany do more to correct North-South imbalances and lower borrowing for the whole eurozone.

Croatians vote in favor of E.U. membership
By Michael Birnbaum - Telegraph.co.uk
BERLIN — Croatians voted Sunday to join the European Union, after a heated campaign that reflected how the economic turmoil of the past several years has damaged the prestige of membership.
Not long ago, becoming a member of the E.U. club was seen as a quick ticket to economic success, as borrowing costs dropped and investors swarmed some of the former Eastern Bloc countries that joined eight years ago. Now, the union is notable mainly for the financial upheaval that has threatened to spread across the Atlantic and affect growth in the United States as well as in Europe.

America overcomes the debt crisis
as Britain sinks deeper into the swamp
Britain has sunk deeper into debt. Three years after bubble burst, the UK has barely begun to tackle the crushing burden left by Gordon Brown. The contrast with the United States is frankly shocking.
By Ambrose Evans-Pritchard - Telegraph.co.uk
The latest report on "Debt and Deleveraging" by the McKinsey Global Institute shows that total public and private debt in the UK is still hovering at an all-time high. It has risen from 487pc to 507pc of GDP since the crisis began.
As the chart above shows, as recently as 1990 Britain’s debts were still just 220pc of GDP. Has a rich country ever been debauched so fast in peace time?

Keiser Report: Scam On Epic Scale (E238)

Bernanke near inflation target prize, but jobs a concern
By Mark Felsenthal
(Reuters) - The Federal Reserve could take the historic step this week of announcing an explicit target for inflation, a move that would fulfill a multi-year quest of the central bank's chairman, Ben Bernanke.
An inflation target would be the capstone of Bernanke's crusade to improve the Fed's communications, an initiative aimed at making the central bank more effective at controlling growth and inflation. It would, at long last, bring the Fed into line with a policy framework used by most other major central banks.

Why it's time to break up the 'too big to fail' banks
Customers would benefit, the U.S. government would benefit, and - believe it or not - the big banks themselves would do better.
By Sheila Bair, contributor - Forbes.com
FORTUNE -- America is downsizing. Whether it's the food we eat, the cars we drive, or the houses we live in, Americans are concluding that smaller is better. Even U.S. corporations are starting to see the benefit of more Lilliputian institutions; the impending --and widely hailed -- breakups of McGraw-Hill (MHP) and Kraft (KFT) are two examples.

Steve Forbes: Bernanke out.
Ron Paul for chairman of the Federal Reserve

FOMC Meeting Preview
by CalculatedRisk
There will be a two day meeting of the Federal Open Market Committee (FOMC) this coming Tuesday and Wednesday. I expect no changes to the Fed Funds rate, or to the program to "extend the average maturity of its holdings of securities" (scheduled to end in June 2012), or to the program to "reinvest principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities". I don't expect further accommodation (aka "QE3") to be announced at this meeting.

Housing Recovery?
BY CARL SWENLIN - FinancialSense.com
The market rally on Wednesday was driven in part by a surge in housing stocks, which was triggered by a favorable housing report. Since the fundamentals of the housing market are not too thrilling, regardless of short-term gains, my curiosity was piqued and I pulled up some charts.
The daily chart of the Dow Jones US Home Construction Index, which is one of a set of 100 Dow Jones US sector indexes we track, shows that Wednesday's rally was a small extension of a +78% up move that began after the Index hit rock bottom in October 2011. This is good but how does this rally present in a larger perspective?

Keiser Report: Sinking Ship In Credit Sea (E239)

Mortgage Principal Cuts Don’t Help Homeowners,
says Credit Suisse
By Jody Shenn - Bloomberg.com
Reducing mortgage balances is a risky idea that hasn’t been shown to keep borrowers who owe more than their property’s worth in their homes, according to Credit Suisse Group AG. (CSGN)
Of the 11 million of "underwater" homeowners, about 6.5 million have never missed a payment and 2 million more are making on-time payments after a delinquency, said Dale Westhoff, the bank’s global head of structured products research. Widespread principal reductions may drive defaults "much, much higher" as borrowers seek the aid, he said.

Something to Argue About
By George Will - PatriotPost.us
WASHINGTON -- The Supreme Court can pack large portents in small details. When in late March it considers the constitutionality of Obamacare, there will be five and a half hours of oral argument -- the most in almost half a century. This is because the individual mandate (Does Congress' power to regulate interstate commerce extend to punishing the inactivity of not buying insurance?) is just one of the law's constitutionally dubious features.
An hour of argument will be devoted to whether Obamacare's enormous expansion of Medicaid is so coercive of states that it is incompatible with federalism -- the Constitution's architecture of dual sovereignty. The court's previous rulings about compulsion point toward disallowing this expansion.

17 Facts About The Decline Of The U.S. Auto Industry
That Are Almost Too Crazy To Believe
TheEconomicCollapseBlog.com
Very few things illustrate how dramatically America has been deindustrialized than the stunning decline of the U.S. auto industry. Once upon a time, the United States literally taught the rest of the world how to make cars. We were the ones that invented the assembly line. We were the ones that showed the rest of the world what mass production could do for an economy. For decades, we produced more cars than anyone else and we sold more cars than anyone else. Detroit was known as "the Motor City" and our manufacturing prowess dominated the planet. But now all of that has changed. Japan makes far more vehicles than we do today. So does Germany. As you read this, state of the art production facilities are going up all over China. Meanwhile, the U.S. auto industry continues to rot and thousands upon thousands of good automotive jobs continue to leave our shores. The rest of the world is making cars better than we are, they are making them cheaper than we are and they really don't care that many of our formerly great manufacturing cities are turning into rotting, stinking hellholes. The U.S. auto industry was once a symbol of American dominance, but now it is just a symbol of American decline. If we want to remain a great nation, then we need to start becoming great at making things once again.

US financial & economic collapse-
On the Edge with Max Keiser-01-20-2012

US workers spend $1000 a year on coffee,
$2000 a year on lunch
CommodityOnline.com
You know that, for the sake of your budget, you should kick the ever-more-expensive Coffee habit. And, for that matter, that you should make yourself a brown-bagged BLT to bring to work rather than getting Chipotle for the third time this week. But mornings are tough! And how much harm could a few cups of coffee, and a few burritos, do?
According to a recent survey of 1000 American workers by Accounting Principals, quite a bit. The firm's data show that half of American workers regularly buy coffee during the week. This half spent an average of $1092 a year; that's over $5 a day. An even larger proportion of workers -- a full two-thirds -- buy lunch at work. These folks spend even more than the coffee drinkers. On average, the midday meal costs lunchers $1924 a year. That's even more than commuting, which accounts for about $1500 a year.

PayPal Will Expand In-Store Payments
By Danielle Kucera - Bloomberg.com
EBay Inc. (EBAY)’s PayPal e-commerce payment business plans to let shoppers pay with its service in more than 2,000 Home Depot Inc. stores by March, part of an effort to win away customers from credit-card companies.
The company began a trial with shoppers this week in 51 of Home Depot’s home-improvement stores, primarily in the San Francisco area, said Anuj Nayar, a spokesman for PayPal. It intends to extend the offer to all national locations, or about 2,200, he said.

Subculture of Americans prepares for civilization's collapse
By Jim Forsyth
(Reuters) - When Patty Tegeler looks out the window of her home overlooking the Appalachian Mountains in southwestern Virginia, she sees trouble on the horizon.
"In an instant, anything can happen," she told Reuters. "And I firmly believe that you have to be prepared."
Tegeler is among a growing subculture of Americans who refer to themselves informally as "preppers." Some are driven by a fear of imminent societal collapse, others are worried about terrorism, and many have a vague concern that an escalating series of natural disasters is leading to some type of environmental cataclysm.

Gerald Celente - Michael Harris CFRA - 19 January 2012

There Are 1.4 MILLION Gang Members In The United States And More Pour Into The Country Every Single Day
EndOfTheAmericanDream.com
A vast army of heavily armed criminals has embedded itself in every major city in the United States. In fact, nearly every community in America is now affected by these thugs. Drugs, theft and brutal violence are all part of the every day lifestyle of the members of this army. They aggressively recruit our young people and floods of illegal immigrants are joining their ranks. Once civil unrest erupts in America, they will go on a crime spree that will be absolutely unprecedented and they will burn large areas of some U.S. cities to the ground. So who am I talking about? I am talking about the rapidly growing gangs that are terrorizing cities all over the nation. The FBI tells us that there are now 1.4 million gang members involved in the 33,000 different gangs that are active inside the United States.

China gets jump on U.S. for Brazil’s oil
Two export pacts a coup for Beijing
By Kelly Hearn - Special to The Washington Times
BUENOS AIRES — Off the coast of Rio de Janeiro — below a mile of water and two miles of shifting rock, sand and salt — is an ultradeep sea of oil that could turn Brazil into the world’s fourth-largest oil producer, behind Russia, Saudi Arabia and the United States.
The country’s state-controlled oil company, Petrobras, expects to pump 4.9 million barrels a day from the country’s oil fields by 2020, with 40 percent of that coming from the seabed. One and a half million barrels will be bound for export markets.

Islamic flag over the White House
Radical Muslims want America ruled by Shariah
Oct 3, 2012 Editorial by The Washington Times
Islamists say the Koran is destined to rule America. In fact, the Muslim takeover of the White House is not just an unfolding action plan but a directive from Muhammad himself.
In an interview Sunday on ABC’s "This Week," British radical Muslim activist Anjem Choudarymade clear what he and his Islamist brothers have planned for the West. "We do believe, as Muslims, the East and the West will one day be governed by the Shariah," he said. "Indeed, we believe that one day, the flag of Islam will fly over the White House." He then quoted a hadith, or saying of Muhammad, as related by 10th-century Muslim scholar Al-Tabarani, that "the final hour will not come until Muslims conquer the White House." Another version of the saying goes, "A small portion of Muslims will rise and conquer the White House."

U.S. aircraft carrier enters Gulf without incident
By David Alexander
(Reuters) - A U.S. aircraft carrier sailed through the Strait of Hormuz and into the Gulf without incident on Sunday, a day after Iran backed away from an earlier threat to take action if an American carrier returned to the strategic waterway.
The carrier USS Abraham Lincoln completed a "regular and routine" passage through the strait, a critical gateway for the region's oil exports, "as previously scheduled and without incident," said Lieutenant Rebecca Rebarich, a spokeswoman for the U.S. Fifth Fleet.

OPEC seeks to stayout of Iran-West spat
Tehran threatens Strait of Hormuz
By Tarek el-Tablawy- AP - WashingtonTimes.com
CAIRO — OPEC’s acting president said the oil cartel should stay out of political battles, Iran’s official IRNA news agency reported Sunday, an apparent bid by the bloc to steer clear of a potential showdown between Tehran and the U.S. over threats to close the vital Strait of Hormuz.
Iraqi Oil Minister Abdul-Karim Elaibi said that while Iran’s “enemies” have imposed various sanctions on the Islamic republic, the 12-nationOrganization of the Petroleum Exporting Countries‘ main focus should be protecting its members’ interest and not being dragged into a political struggle over oil.

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Friday 01.20.2012

China's banks urge man on the street to invest in gold
With gold consumption in China expected to overtake that of India in the next few years, some of the country's leading banks are already reaping the benefits as customers flock to new gold products.
Author: By Rujun Shen - Mineweb.com
SINGAPORE (REUTERS) - For Chinese shipping executive Ping Bo buying gold is the best way to protect his family's wealth and give his 10-year-old son a headstart into adulthood.
"For my son, the idea is that he will get a nice stash of gold that he can cash out when he turns 21 or when he gets married," said Ping, one of over 2 million people that have opened accounts in the past two years to accumulate gold at the Industrial and Commercial Bank of China (ICBC).

Physical gold purchases increase
LONDON (Commodity Online): Demand for physical Goldhas been strong across the board this week. Demand from India has been solid despite the recent increase in gold import duties, said UBS in a research note.
"Indeed, demand from India yesterday (Wednesday) was the strongest we’ve seen this year and again is very decent so far today (Thursday)," UBS added.
Part of it could be stock drawdowns as the old tax rate applies on current supplies, but gold priced in rupees fell 2% on Wednesday, they noted.

How gold to quickly triple in price?
interview with John Embry - CommodityOnline.com
With Gold holding on to gains above the $1,650 level, in this exclusive interview with John Embry, Chief Investment Strategist of the $10 billion strong Sprott Asset Management, he sees gold headed from here. Embry informed that gold was very close a major breakaway move to the upside. Here is what Embry had to say about the situation: "I’ve been of the mind for a considerable period of time that the gold price really wouldn’t accelerate to the upside until such time as the physical market finally overwhelmed the paper market. But I think we’re reaching the stage now where there is mounting buying of physical because people are starting to realize the paper price is fraudulent."

The Intrinsic Value of the Dollar and Gold
Michael Pento - 321Gold.com
If you ask most investors what is the main driver for the price of gold they are likely to tell you that it’s the direction of the U.S. dollar. Therefore, the only due diligence most investors perform is a perfunctory glance at the Dollar Index (DXY). While it is true that the purchasing power of the dollar is a key metric to judge the direction of gold prices, the DXY will only tell you what the dollar is doing against a basket of 6 other flawed fiat currencies.

How will Gold and Silver perform in 2012?
By Jordan Roy-Byrne - CommodityOnline.com
Lately we've been writing about the precious metals stocks. In particular we believe the equities have made a multi-year bottom and look ready for a solid 2012 and 2013. Part of the reason is the action in the metals (Gold & Silver) suggests an important bottom is in place and a rebound is underway.
Based on our work, we anticipate a slow but gradual rebound in both metals. The current bottom in Gold bears similarities to what we saw in 2006. First we show the bottom in 2006. Note the previous bull flag (blue), the double bottom pattern and the final low occurring at the 300-day moving average. Going forward, Gold rallied for five months and recovered over 75% of the losses.

Key Pillars of Gold Bull Market Intact
By: Adrian Ash - MarketOracle.co.uk
WHOLESALE PRICES to buy gold and silver with Dollars both eased back after touching new 5-week highs in London, rising 1.3% and 3.0% respectively for the week-so-far as the US currency fell further from this week's 17-month high to the Euro.
Global equities rose for the fourth day running, with shares in Bank of America adding 6.1% in pre-market US trade after it reported better-than-forecast quarterly earnings.

Eye on U.S. Dollar vs Commodity Index
By: Mike Paulenoff - MarketOracle.co.uk
One chart set-up that we need to watch closely in the coming hours and days is the comparison of the dollar and commodity indexes, as their directional price implications could have a major impact on a cross-section of markets.
Let's notice that the recent up-leg in the Dollar Index (DXY), which peaked at 81.78 on Jan 13, ended amidst a series of daily RSI momentum divergences that warn us that the U.S. Dollar could be in the early stages of a significant period of weakness. A sustained break of 79.50 will trigger initial signals that such a move is unfolding, which should have a positive impact on the commodity index.

The World Continues Preparations
for the End of the Global Dollar-Based Ecosystem
BY DAN COLLINS - FinancialSense.com
As the Western world enjoyed their Christmas holidays, news broke in Asia of something that was reported in the media but received very little attention.
History may treat this event as something all together of much larger importance than is currently understood. Future Americans will ask why the U.S government could not see the writing on the wall? That is, tools are being put in place that will end the global dollar-based ecosystem.

How Deflationary Forces Will Be Turned into Inflation
Mises Daily: by Thorsten Polleit
The ongoing financial and economic crisis has not only stoked fears that it will end in inflation — as central banks will print up ever-greater amounts of money — but it has also given rise to a diametrically opposed concern: namely, that of deflation.
For instance, in December 2011 Christine Lagarde, head of the International Monetary Fund (IMF), warned that the world might risk sliding into a 1930s-style slump, such as the Great Depression.

The IMF is no longer serving its purpose
To save the eurozone, the International Monetary Fund needs to dispense tough love, not endless bail-outs.
By Jeremy Warner - Telegraph.co.uk
If the International Monetary Fund did not exist, it would surely have to be invented. Its medicine is often harsh and frequently criticised, but as lender of last resort to countries that temporarily find themselves shut out of financial markets, its purpose is noble and necessary.
In no other field has international co-operation worked as successfully in addressing global problems as it has through the offices of the IMF. The world would undoubtedly be a more chaotic place without it. Just lately, however, its credibility has been endangered as rarely before. Something has gone very badly wrong, and the international consensus on which the organisation is based is fracturing.

Niall Ferguson suggests New Year Resolutions
for European Leaders, Obama

Greek debt talks remain elusive
By Ben Rooney @CNNMoneyMarkets
NEW YORK (CNNMoney) -- A deal on restructuring Greek debt remained elusive on Thursday, as the second day of talks with the nation's private sector creditors without an agreement.
Negotiations with Institute of International Finance, which represents the private sector investors who own Greek government bonds, will resume Friday.
The talks in Athens hinge on a plan that that cuts the value of Greek government bonds in half.

IMF slashes global forecast on eurozone crisis,
with drastic falls in Italy and Spain
The International Monetary Fund has slashed its global growth forecast for this year and exhorted the European Central Bank to boost liquidity to stave off a deeper eurozone crisis.
By Ambrose Evans-Pritchard and Louise Armitstead - Telegraph.co.uk
"The global recovery is threatened by the growing tensions in the euro area," the Fund said, according to a leaked draft of its World Economic Outlook which is due to be published next week.
Global GDP growth is to be cut from 4pc to 3.3pc, with drastic revisions for an arc of countries in Southern Europe.
Italy's economy will contract by 2.2pc and Spain's by 1.7pc as fiscal austerity measures bite harder and banks curtail lending, playing havoc with debt dynamics.

ECB Says Banks’ Overnight Deposits Plunged From Record High
By Gabi Thesing - Bloomberg.com
The European Central Bank said overnight deposits from financial institutions dropped from a record high at the start of a new reserve maintenance period.
Euro-area banks parked 395.3 billion euros ($508.4 billion) with the Frankfurt-based ECB yesterday, down from 528.2 billion euros a day earlier, which was the most since the euro was introduced in 1999.

Marc Faber - Fox Business News - 17 January 2012

Future EU bail-outs only for treaty signatories,
new draft says
BY VALENTINA POP - EUObserver.com
BRUSSELS - The latest version of the treaty on EU fiscal discipline says countries cannot get bail-outs unless they sign and apply the pact. It also makes concessions to non-euro countries who want to take part in eurozone summits.
Giving in to a German demand on the issue, the text - seen by EUobserver - says: "Granting of assistance in the framework of new programmes under the European Stability Mechanism [ESM] will be conditional, as of 1 March 2013, on the ratification of this treaty by the contracting party concerned and as soon as the transposition period ... has expired, on compliance with the requirements of this article."

Portugal to need "debt haircut"
as economy tips into Grecian downward spiral
Portugal's borrowing costs have jumped to record highs and are tracking the moves seen in the culminating phase of Greece's debt crisis, dashing hopes that the country will be able to stave off contagion by embracing drastic austerity.
By Ambrose Evans-Pritchard - Telegraph.co.uk
Yields on Portugal's 10-year bonds climbed to 14.39pc on Thursday. Credit default swaps measuring bond risk have reached 1270 points, pricing a two-thirds chance of default over the next five years.
While some of the latest damage reflects forced selling of Portuguese debt after Standard & Poor's cut the country's credit rating to junk status last Friday, there are deeper worries that sharp fiscal cuts by the free-market government of Pedro Passos Coelho may prove self-defeating.

EU treaty draft:
Bailouts only offered to countries that ratify budget pact
Bailouts will only be offered to European governments that ratify a new budget pact aimed at avoiding a repeat of the eurozone debt crisis, according to a new draft of the treaty.
By Telegraph staff and agencies
"The granting of assistance in the framework of new programmes under the European Stability Mechanism [ESM] will be conditional, as of March 1, 2013, on the ratification of this treaty," according to the draft, seen 11 days before an EU summit due to approve the document.
Negotiators working on a pact to be signed by 26 of the 27 European Union states - with Britain remaining odd man out - toughened up the treaty in many respects ahead of planned talks between finance ministers from all 27 states, including Britain, late on Monday in Brussels.

Iranian oil, gold and banks on EU hitlist
BY ANDREW RETTMAN - EUObserver.com
BRUSSELS - An oil embargo from 1 July, a partial ban on the central bank and a prohibition on trade in gold and gems are among the latest EU ideas on how to stop Iran building nuclear bombs.
Talks in Brussels on details are expected to go on until Friday (20 January) before EU foreign ministers unveil the sanctions on Monday.

Ferguson Says EU 'Long Way' From Stabilizing Crisis

In MF Global, JPMorgan again at center of a financial failure
By Carrick Mollenkamp, Lauren Tara LaCapra and Matthew Goldstein
(Reuters) - In late October, as MF Global Holdings Ltd teetered toward bankruptcy, Jon Corzine phoned his close-knit circle of Wall Street friends for help.
His firm, facing demands from customers and other firms for cash, needed to sell billions of dollars in securities to raise the money. As the week progressed, MF Global executives came to believe that JPMorgan Chase & Co., one of MF Global's primary bankers and a middleman moving that cash, was dragging its feet in forwarding the funds.

Repairing the Global Plumbing
Mohamed A. El-Erian - Project-Syndicate.org
NEWPORT BEACH – More than three years after the global financial crisis, the world still has a nasty plumbing problem. Credit pipes remain clogged, and only central banks are working to clear them. But their ability to do so is waning, posing yet another set of risks for Western economies blocked by too little growth, too much unemployment, deepening inequality, and debt in all the wrong places. Fortunately, it is not too late to build broader pipes that compliment and replace the damaged infrastructure.

Deutsche Analyst Sounded Alarm
When Asked to Alter Numbers
by Carrick Mollenkamp - ProPublica.org
At a time when mortgage-backed securities were imploding and customers were fleeing the market, a junior analyst at Deutsche Bank AG protested when he was asked to alter the numbers in a spreadsheet to make a Deutsche security look less risky to ratings agencies, according to a person with knowledge of the matter.
The analyst, this person said, was asked by a mid-level Deutsche executive in late 2007 to make it appear that the investment would produce more cash than the bank actually expected at certain time points.

Keiser Report: Scam On Epic Scale (E238)
We discuss 419 scams and Tim Geithner’s gimp. In the second half of the show, Max talks tofinancial blogger and semi-retired Wall Street executive Warren E. Pollock about MF Global, wealth confiscation and bank holidays.

MF Global Commodity Customers
Must Be Paid First, CFTC Says
By Linda Sandler
Jan. 18 (Bloomberg) -- MF Global Inc. commodity customers must be paid before all other claimants, including the bankrupt parent company, according to the Commodity Futures Trading Commission.
Court papers by the trustee for MF Global Holdings Ltd., Louis Freeh, contain "errors and misstatements of law" in arguing that commodity laws, which require that customers be "made whole" first, don't apply to brokerage liquidations, the regulator said in a court filing today. Freeh, representing the parent company creditors, has said money due to them shouldn’t be "diverted" to customers.

Is trading dead?
By Maureen Farrell @CNNMoneyMarkets
NEW YORK (CNNMoney) -- It's been eerily quiet on stock trading desks around Wall Street and across the United States. In fact, it's been the slowest and lowest volume start to the year since 2007.
During the first 10 trading days of 2012, roughly 6.8 billion shares a day changed hands in the United States, down from 8 billion in 2011 and 8.3 billion in 2010, according to the New York Stock Exchange. In 2007, trading volumes dropped as low as 5.8 billion.

No way to prevent brokers from stealing
No silver bullet to avert another MF Global: regulator
By Ann Saphir
(Reuters) - Increased surveillance cannot guarantee customers will never again lose money in a broker insolvency, though the collapse of MF Global Holdings may lead futures exchanges to conduct more spot checks, a top U.S. regulator said on Thursday.
The admission by National Futures Association chief Dan Roth, who is organizing an industry response to the broker's failure aimed at rebuilding confidence in futures trading, suggests scars from the implosion may be difficult to erase.

Jim Rogers - Market Outlook For 2012

Congress’s Six-Figure Benefits
Add to $674 Billion Pension Gap
By Charles R. Babcock and Frank Bass - Bloomberg.com
Almost 15,000 federal retirees, including former leaders of Congress, a university president and a banker, are receiving six-figure pensions from a system that faces a $674.2 billion shortfall.
About one of every 125 retired federal civilian workers collects more than $100,000 in benefits annually. They include physicians, postal workers and presidential candidate Newt Gingrich, according to data obtained by Bloomberg News under the federal Freedom of Information Act.

The Substitution of Debt for Productivity
BY CHARLES HUGH SMITH - FinancialSense.com
You Can't Fool Mother Nature For Long
The "big story" of the U.S. economy is that we have substituted expansion of debt for meaningful increases in productivity.
For the past 30 years, the U.S. economy has become increasingly dependent on explosive debt expansion for its "growth" rather than on meaningful rises in meaningful productivity. Growth is in quotes because growth based on secular increases in productivity--that is, the same investment of labor and capital produces goods and services of greater value--is qualitatively different from "growth" based on a pyramiding of debt. Real growth based on rising productivity is sustainable, "growth" based on ever-greater expansions of debt is not.

South Carolina retirees are changing the discussion
Republican presidential candidates are having to address the older population's economic concerns more than religious conservatives' issues.
By Alana Semuels, Los Angeles Times
Reporting from Mount Pleasant, S.C.— They amble in every morning to the back table, shake hands and sit beneath the sign saying "B.S. Community table," which, depending on whom you ask, either stands for Bible study or another kind of B.S.
This morning, the nine or so people at the diner are talking politics as they lean over cheese-covered grits, thick omelets and triangles of toast covered in butter.

Downward Mobility is Crushing the American Dream
BY DAVID ZEILER, Associate Editor, Money Morning
Forget about getting ahead. For many in the middle class these days it's more about not sliding backwards.
It's called downward mobility and it's crushing the American Dream.
According to a study conducted by the Pew Charitable Trusts, nearly one out of three U.S. citizens born into middle class households in the 1960s have lost their economic status.
And because the study used data from 2004 to 2006 - before the Great Recession - the numbers today could be even worse.

The Middle Class Disappears, Rise of the Praetorian Class
By: Casey Research - MarketOracle.co.uk
Pete Kofod writes: Much attention has been paid to the "disappearing middle class" and the "vanishing American Dream." While the observations are largely accurate, they are also misleading. The traditional three-tier model of the upper, middle and lower class broadly categorizes people according to income and net worth. One significant problem with this model is that membership in any particular class is very much in the eye of the beholder. One man’s "scraping by" is another man’s "opulent living." This subjective and arbitrary grouping and boundary assessment inevitably gives rise to the simmering class warfare that is starting to rear its ugly head in many Western countries. Such categorization is therefore meaningless at best, if not outright deceptive as it conflates a variety of economic actors.

Lawler: Housing Forecast for 2012
From economist Tom Lawler - CalculatedRisk.com
At the beginning of 2011, the "consensus" forecast for total housing starts was in the 690,000 to 700,000 range, with most analysts looking for an increase in both Single Family (SF) and Multifamily (MF) starts. Early last year one well-respected analysts who regularly surveys SF builders said that on average builders planned to increase SF starts by 15-20% in 2011. As I noted at the time, however, such an increase seemed highly unlikely given new and existing inventories, distressed sales, and pricing relative to where builders were willing to sell homes. It turned out, of course, that new home sales in the early months of last year were "quite disappointing" in aggregate, and builders in aggregate quickly changed their "plans."

One million homeowners may get mortgage writedowns: U.S
By Margaret Chadbourn and Aruna Viswanatha
(Reuters) - About one million American homeowners would get writedowns in the size of their mortgages under a proposed deal with banks over shady foreclosure practices, U.S. Housing and Urban Development Secretary Shaun Donovan said on Wednesday.
The deal, which could be struck within weeks, would mark the largest cut in the mortgage load since the start of the credit crisis.

Bank of America Says
Loan Repurchase Claims Rise to Record $14.3 Billion
By Andrew Frye and Hugh Son - Bloomberg.com
Bank of America Corp., the second- biggest U.S. lender by assets, said unresolved demands from investors who accuse the company of selling defective mortgages rose to a record.
Outstanding claims jumped 22 percent in three months to $14.3 billion as of Dec. 31, the Charlotte, North Carolina-based bank said today in apresentation. The increase was fueled by disputes with Fannie Mae and private investors who are submitting demands for compensation on the grounds that they were misled about the quality of mortgage securities.

The Many Benefits of Creating a Single Food Safety Agency
According to the latest rumors, the Office of Management and Budget wants to merge some agencies, including the FDA and the USDA. -- By Marion Nestle - TheAtlantic.com
According to rumors passed along by Dan Flynn at Food Safety News via the Hagstrom Report (an agricultural subscription news service costing $999 a year), the Office of Management and Budget wants to merge federal agencies, among them the food safety components of the Food and Drug Administration (FDA) and the United States Department of Agriculture (USDA).
Rumors are that the Obama administration wants to do this to make "food safety independent of the USDA, which primarily exists to market and promote American farm products."

Overweight people can't fly, airlines say
Pravda.ru
As many as 78 million people suffer from excessive weight in the United States of America. In other words, it goes about a third of the US population. The majority of obese individuals in the country are women. Most of those people are aged 20 and older. The share of obese women is larger than that of men - 40.6 vs. 37.5 million respectively. As for children and teenagers, the proportion is different: 5.5 million obese girls and 7 million obese boys, Amitel reports.
Medical specialists say that in comparison with the recent decades of the past century, the growth of the number of obese individuals had dropped during the recent years. As for those aged 60 and older, they suffer from obesity more frequently than younger people, Baltinfo reports.

Kodak Files for Bankruptcy as Digital Era Spells End to Film
By Dawn McCarty and Beth Jinks - Bloomberg.com
Eastman Kodak Co. (EK), the photography pioneer that introduced the Brownie Camera more than a century ago, filed for bankruptcy after consumers embraced digital cameras, a technology Kodak invented and failed to commercialize.
The Rochester, New York-based company, which traces its roots to 1880, listed assets of $5.1 billion and debt of $6.8 billion in Chapter 11 documents filed in U.S. Bankruptcy Court in Manhattan.

Megaupload.com Charged
in $175 Million U.S. Criminal Copyright Conspiracy
By Tom Schoenberg - Bloomberg.com
Megaupload.com, a file-sharing website, was shut down as part of an alleged $175 million copyright infringement conspiracy, triggering an online protest that disrupted websites of the U.S. Justice Departmentand movie and music trade groups.
Charges against seven individuals, Megaupload Ltd. and Vestor Ltd. were unsealed today in federal court in Alexandria, Virginia, after four of the alleged conspirators were arrested in Auckland, New Zealand. Three suspects remain at large, according to the Justice Department.

Secretary Clinton won't testify on Keystone pipeline rejection
By Andrew Restuccia - TheHill.com
Secretary of State Hillary Clinton will not testify next week at a House Energy and Commerce Committee hearing on President Obama’s decision to reject the Keystone XL pipeline.
Instead, Kerri-Ann Jones, assistant secretary of state for oceans and international environment and scientific affairs, will testify at the hearing, according to the committee.
Jones headed up the State Department’s review of the pipeline, which would carry oil sands crude from Alberta, Canada, to refineries along the Gulf Coast.

The 10 Fastest-Growing
(and Fastest-Declining) Cities in the World
A new survey from the Brookings Institution ranks the world's 200 largest metropolitan economies -- which account for half of global GDP -- from 1-200. And the winners are ...
By Derek Thompson - TheAtlantic.com
Shanghai is the fastest-growing city in the world, according to MetroMonitor, a quarterly analysis from the Brookings Institution that compares the 200 most prosperous metros by income and job growth. The victims of the euro zone crisis dominate the end of the list. Athens, Lisbon, and Dublin, the capitals of the three most endangered nations in Europe's sovereign debt crisis, made up the bottom three.
Here are the ten fastest-growing cities (and the ten least dynamic cities) studied by the Brookings Metropolitan Policy Program.

The Nine American Cities Nearly Destroyed by the Recession
247WallSt.com
The nation continues to be mired in an anemic, jobless recovery. And according to a report commissioned by the United States Conference of Mayors, and prepared by IHS Global Insight, many regions in the country still continue to lose jobs. Of the 363 U.S. metropolitan regions reviewed by IHS, only 61 will fully recover all the jobs that were lost during the recession by the end of this year. The rest will recover far fewer — the average city will only recover roughly 40% of jobs lost from peak employment.

The US-GCC fatal attraction
By Pepe Escobar - ATimes.com
There's no way to understand the larger-than-life United States-Iran psychodrama, the Western push for regime change in both Syria and Iran, and the trials and tribulations of the Arab Spring(s) - now mired in perpetual winter - without a close look at the fatal attraction between Washington and the GCC. [1]
GCC stands for Gulf Cooperation Council, the club of six wealthy Persian Gulf monarchies (Saudi Arabia, Qatar, Oman, Kuwait, Bahrain and the United Arab Emirates - UAE), founded in 1981 and which in no time configured as the prime strategic US backyard for the invasions of Afghanistan in 2001 and Iraq in 2003, for the long-drawn battle in the New Great Game in Eurasia, and also as the headquarters for "containing" Iran.

Money Insider: US Will See Violent Civil Unrest In 2012
Armed, irritated and vocal majority will react to worsening economic decline
By Paul Joseph Watson - Infowars.com
Money insider Charles Ortel has warned that a worsening economic picture across the globe will see civil unrest hit the streets of America, not on behalf of leftist OWS types, but by an armed, "irascible and vocal Majority".
Ortel, a managing partner with Newport Value Partners, LLC in New York City, predicts that a failure of the so-called financial recovery will precipitate "A painful re-calibration of economic strength and geo-political standing during 2012 in the midst of widespread civil insurrection and cross-border war."

Alex Jones:
Military Industrial Complex has declared war on the US
Next month the Federal Aviation Administration will be proposing new rules to make it easier for law enforcement agencies to have permission to use predator drones on American citizens.
In the past decade the Pentagon’s unmanned predator drones went from 50 to 7,000. Many fear the use of these drones on Americans are infringing on their civil liberties. Alex Jones, radio show host, joins us to look deeper into why predator drones are flying domestically.

NATO Drilling For Nuclear Attack On Iran and Syria?
By Tim Earl of Stirling, Contributing Writer - ActivistPost.com
Yesterday, I carried a story on a crash between a French Air Force Mirage and a Royal Saudi Air Force F-15. The story confirmed that the Saudi pilot and the two French pilots were safe. Little additional information was available. Today, I am able to report that the two-seat Mirage was in fact either a French Air Force Mirage 2000-D or a 2000-N. Both aircraft, in their later variants are virtually identical and are used for the long-range nuclear strike role by the French Air Force.

Russia: EU and US want war with Syria
BY ANDREW RETTMAN AND NIKOLAJ NIELSEN - EUObserver.com
BRUSSELS - Russia has accused Nato countries of trying to start a war with Syria and foment unrest in Iran - claims backed up by some Western security analysts.
Its foreign minister, Sergei Lavrov at a press briefing in Moscow on Wednesday (18 January) said: "Our partners in the West are in fact discussing a no-fly zone ... There are other ideas being realised, including humanitarian convoys, in the hope they could provoke a response from [Syrian] government forces."

USS Stennis Supposedly Leaves Straits Of Hormuz,
Replaced By USS Lincoln With USS Vinson
Staying Put, But Not Just Yet
Submitted by Tyler Durden - ZeroHedge.com
For those following the latest naval developments in the general Arabian Sea area and the Straits of Hormuz in particular, the latest news is that the duo of Aircraft carriers on location, as was reported last week, the USS Stennis and USS Vinson, has became a trio, with the arrival of the USS Lincoln, however, if only briefly. According to the US Navy's website, CVN 74 Stennis has left the 5th Fleet, and is now back in the 7th fleet, on its way home. Yet this is somewhat contradictory with the following picture posted on the facebook profile of one CVN 72 Abraham Lincoln (yes, faceook), which quite vividly shows CVN 74 - the same Stennis - and CVN 72, Lincoln, side by side, at least as of this morning. As such, absent further photographic evidence to the contrary, it may be the case that while the Stennis is planned to be on its way back, but in reality is still in the vicinity. Which begs the question: why three aircraft carriers in the Arabian Sea, and for how long?

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Thursday 01.19.2012

Premature Obituaries for the U.S. Dollar
BY ANTAL FEKETE - FinancialSense.com
It is open season for wild monetary prognostications. More premature obituaries on the dollar have been posted on the Internet. For example, see Jim Willie’s The US Dollar Paper Tiger(Financial Sense, January 11) with epitaphs like "the U.S. dollar rising to the cemetery", or "dollar death dance". Or see another article, Jeff Nielsen’s entitled Maximum Fraud in U.S. Treasuries (Gold-Eagle, January 3). It betrays maximum misunderstanding about keeping the dollar on a life-support system. It assumes that the Fed and the U.S. Treasury are fighting tooth and nail to keep the value of government debt high lest it collapse in want of support from Japan, China, and other countries.
These views hang the picture upside down. In actual fact, the Fed and the U.S. Treasury desperately want to beat down the value of the dollar. The greatest obstacle frustrating their effort is the stubbornly high and still increasing value of U.S. Treasuries. Captains of the world’s monetary system are yanking levers and twisting throttles which are no longer connected to anything. The captains are no longer in control...

World Bank to World: 'Prepare for the Worst'
By Derek Thompson - TheAtlantic.com
If the euro zone finally loses its grip on its super-slo-mo meltdown, the countries paying the highest price might not be the ones confined to the euro, according the World Bank's new morbid report on the global economy.
"Developing countries need to prepare for the worst," the Bank said, describing how the European sovereign debt crisis could spread to every corner of the globe. "In this highly uncertain environment, developing countries should evaluate their vulnerabilities and prepare contingencies to deal with both the immediate and longer-term effects of a downturn."

World Bank warns emerging nations
By Chris Giles in London - FT.com
Developing countries should take steps to plan for a global economic meltdown on a par with 2008-09 if the European sovereign debt crisis escalates, the World Bank warned on Wednesday in its latest economic forecasts.
Predicting significantly slower global growth in 2012 than it expected last summer even if the eurozone muddles through its crisis, World Bank economists said that if financial markets deny funds to eurozone economies, global growth would be about 4 percentage points lower than even these figures, with poorer economies far from immune.
Andrew Burns, head of macroeconomics at the Bank, told journalists in London: "Developing countries should hope for the best and prepare for the worst."

Hedge Funds May Sue Greece if It Tries to Force Loss
Posted: AthensWire.com
The novel approach would have the funds arguing in the European Court of Human Rights that Greece had violated bondholder rights, though that could be a multiyear project with no guarantee of a payoff. And it would not be likely to produce sympathy for these funds, which many blame for the lack of progress so far in the negotiations over restructuring Greece’s debts.
The tactic has emerged in conversations with lawyers and hedge funds as it became clear that Greece was considering passing legislation to force all private bondholders to take losses, while exempting the European Central Bank, which is the largest institutional holder of Greek bonds with 50 billion euros or so.

Greece, creditors haggle to avoid costly default
Posted: AthensWire.com
ATHENS (Reuters) – Greece began a new round of bargaining on a bond swap deal with its creditors on Wednesday, with both sides under mounting pressure to iron out differences before they push Athens to a messy default.
The two sides said little after the more than two-hour meeting other than to note they would meet again on Thursday. Greece needs a deal within days to avoid the prospect of default when bond redemptions come due in March.
"They are working hard to breach differences and they will continue tomorrow," a source close to the talks told Reuters.

World Bank fears Europe's crisis
could set off deeper global slump than Lehman collapse
The World Bank has slashed its global growth forecast and told developing nations to prepare for the worst, warning that Europe’s debt crisis could trigger an even deeper slump than the post-Lehman collapse three years ago.
By Ambrose Evans-Pritchard - Telegraph.co.uk
"The global economy has entered a dangerous phase. The financial system of the largest economic bloc in the world is threatened by a fiscal and financial crisis that has so far eluded policy-makers’ efforts to contain it," said the bank in its Global Economic Perspectives.
"The possibility of further escalation of the crisis in Europe cannot be ruled out. Should this happen, the ensuing global downturn is likely to be deeper and longer-lasting than the recession of 2008/2009 because countries do not have the fiscal and monetary space to stimulate the global economy. Activity is unlikely to bounce back as quickly."

Merkel won't be the one smiling
if Germany loses its AAA rating too
Poor old Sarko. Fancy resorting to "scheduling problems" to get out of this Friday's hot date with Angela "triple A" Merkel.
By Alistair Osborne - Telegraph.co.uk
Anyone would think the titchy French leader couldn't face it. She, the Teutonic powerhouse. He, just a AA+ guy – one notch above the breakdown service.
Nicolas Sarkozy may struggle with the concept. But even he must have known a downgrade was coming, with France's banks having the biggest exposure in Europe to the PIIGS – Portugal, Italy, Ireland, Greece and Spain. Why, it's worth 24pc of GDP.

France and the death of the sovereign debt market
Investors will seek other safe havens
By Matthew Lynn
LONDON (MarketWatch) — So where was the carnage?
Late last Friday night, the ratings agency Standard & Poor’s delivered its downgrade of French debt, stripping one of the world’s biggest economies of its AAA rating.
Over the weekend, it wasn’t hard to imagine the cataclysm that would follow. After all, the news could hardly be more worrying. The French debt market is one of the largest in the world — with $1.6 trillion of debt outstanding, France is the world’s fourth-largest sovereign borrower.

Euro Climbs as IMF Studies $500 Billion Boost in Capacity;
Dollar Weakens
By Catarina Saraiva - Bloomberg.com
The euro gained for a second day versus the dollar and the yen as theInternational Monetary Fund proposed raising its lending capacity by as much as $500 billion to protect the global economy amid Europe’s debt turmoil.
The 17-nation currency rallied against most of its major peers as Greek officials resumed negotiations with bondholders. The dollar fell against the euro on reduced demand for a refuge as U.S. data showed a rebound in industrial production. Brazil’s real climbed as risk appetite improved, while the pound weakened against the euro as Britain’s unemployment rose.

Paul gives new life to an old issue: gold standard
By Will Weissert - AP - Boston.com
AUSTIN, Texas—Facing double-digit inflation in 1981, Congress created a commission to consider a role for gold in U.S. monetary policy. The 17-member panel rejected the idea of returning America to the gold standard -- except for two dissenting members.
One was a little-known congressman from Texas named Ron Paul.
Today, Paul's surprisingly strong race for the Republican presidential nomination is drawing new attention to a notion that long has been a cherished cause for a small group of conservatives but is considered a relic of history by mainstream economists and politicians.

Gingrich: U.S. should reconsider gold standard
Gingrich picks up favorite topic of rival Ron Paul and says he wants commission to examine bringing back gold standard. More
By Chris Isidore @CNNMoney
NEW YORK (CNNMoney) -- Republican presidential candidate Newt Gingrich is calling for the United States to think about returning to the gold standard.
Speaking at a foreign policy forum in South Carolina on Tuesday, Gingrich advocated a "commission on gold to look at the whole concept of how do we get back to hard money."
Gingrich, a former Speaker of the House, has spoken in favor of a "hard money" policy in the past, but these were his strongest comments to support reinstating the gold standard.

Gingrich: What about the gold standard?
Gingrich picks up favorite topic of rival Ron Paul and says he wants commission to examine bringing back gold standard.
Gingrich: U.S. should reconsider gold standard
By Chris Isidore @CNNMoney
NEW YORK (CNNMoney) -- Republican presidential candidate Newt Gingrich is calling for the United States to think about returning to the gold standard.
Speaking at a foreign policy forum in South Carolina on Tuesday, Gingrich advocated a "commission on gold to look at the whole concept of how do we get back to hard money."
Gingrich, a former Speaker of the House, has spoken in favor of a "hard money" policy in the past, but these were his strongest comments to support reinstating the gold standard.

Local currencies: 'In the U.S. we don't trust'
By Blake Ellis @CNNMoney
NEW YORK (CNNMoney) -- It may seem like Monopoly money to outsiders, but a growing number of communities across the U.S. are using homegrown local currencies to stimulate their economies and protect themselves from the nation's broader economic woes.
While there were only about 20 active community currencies in the United States in 2009, there has been a recent resurgence, with at least a dozen communities developing their own currencies in the past couple of years, estimates Loren Gatch, a professor of political science at the University of Central Oklahoma who researches these alternative currencies. In addition, currencies that have been around for years have seen a spike in interest, with membership doubling in some cases.

4Q profits slide 26% at Bank of New York Mellon
CEO Gerald Hassell blames the revenue decline on lower-than-normal levels of client activity caused by uncertain market conditions and the seasonality of its depositary receipts business.
CrainsNewYork.com
(AP) - Bank of New York Mellon Corp.'s fourth-quarter net income fell 26%, hurt by restructuring charges and a decline in revenue stemming from less client activity and a seasonal slowdown in one of its businesses.
The results missed Wall Street expectations, and its shares fell more than 2% in premarket trading.

Goldman Sachs' 4Q earnings tumble 58%
Yet another New York bank reported dismal net income for the final three months of 2011, although Goldman Sachs Group Inc. managed to beat analysts' estimates.
CrainsNewYork.com
(AP) - Goldman Sachs Group Inc. says its net income fell 58% in the last three months of last year because of lower investment banking fees in a quarter marked by choppy financial markets.
The investment bank said Wednesday that it made $1 billion, or $1.84 per share, from October through December. The results beat the estimate of $1.28 per share from analysts surveyed by FactSet, a provider of financial data.

Treasury dips into pension funds to avoid debt
ChicagoTribune.com
WASHINGTON (Reuters) - The Treasury on Tuesday started dipping into federal pension funds in order to give the Obama administration more credit to pay government bills.
"I will be unable to invest fully" the federal employees retirement system fund beginning Tuesday, Treasury Secretary Timothy Geithner said in a letter to Democratic and Republican leaders in Congress.

Treasury’s Thrift Savings Plan maneuver
aims to keep government under debt cap
By Eric Yoder - WashingtonPost.com
The federal government resorted to a favorite accounting maneuver Tuesday to stay under its debt limit, suspending the issuance of securities in a retirement savings program for federal and postal employees.
The Treasury Department announced the maneuver involving the Thrift Savings Plan’s government securities fund to keep the government below the $15.2 trillion debt ceiling, pending approval of a higher limit.

Big banks must submit break-up plans under new FDIC rule
AP - LATimes.com
The largest U.S. banks must soon show how they would break up their assets if they were in danger of failing.
The Federal Deposit Insurance Corp. voted Tuesday to require banks with $50 billion or more in assets to submit so-called living wills. Seven banks with more than $250 billion in assets will have to show their plans by July. The other 30 affected by the rule have until 2013.
The FDIC also proposed a separate rule that would require banks with more than $10 billion in assets to conduct annual stress tests.

Man Said to Be Charged in Government Computer Data Theft
By Patricia Hurtado - Bloomberg.com
An employee of a U.S. government contractor was charged with stealing computer source code from the Federal Reserve Bank of New York that the Treasury Department uses to track federal collections and payments.
Bo Zhang, who worked for an unidentified technology company, was a computer programmer assigned to work on source code at the federal reserve from May 2011 until August 2011, the U.S. said in a criminal complaint unsealed today in federal court in New York. Zhang is a Chinese citizen, said a person with knowledge of the matter who didn’t want to be identified because the information wasn’t public.

Art Cashin Shows US Stock Traders Have Left The Building
Submitted by Tyler Durden ZeroHedge.com
Though it won't come as a surprise to too many who have seen us point to US equity outflows and the dreadfully declining volume on the NYSE, we leave it to UBS' Art Cashin to uncover where the real action is - and more importantly where it really is not. The experienced Cashin points to the early excitement as Asia and Europe remain active and the dramatic ebb as both of these markets head off to supper, leaving just US traders(and investors we assume) sitting on their hands, twiddling their thumbs, and generally not playing the game (aside from the general rumor-mongery that appears to be rising day by day).
Art Cashin - UBS: China Flyby And Successful European Auctions Produce Rally That Falters
For months now traders have debated whether China was headed for a soft landing or a hard landing. Yesterday, they released their GDP at 8.9%. While that was a sign of some slowing in China, it was far from a hard or even a soft landing. The wheels never hit the ground.

The Debt Supercycle Reaches Its Final Chapter
BY JAMES J PUPLAVA CFP - FinancialSense.com

"By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens." ~John Maynard Keynes

This year will mark my 32nd year in the business. I began my career in 1980 after spending several years in corporate life, which I did not find to my liking. I had too much of an independent streak and eventually came to the realization that I'd be much better off starting my own business. When I entered the financial world interest rates were beginning to peak, as the long upward climb in inflation was coming to an end under the leadership of Paul Volker at the Fed. It is hard to believe today that interest rates on treasuries were as high as 15.7%. The yields on money market funds were over 18%. Inflation rates were over 14%, with oil prices at $40 a barrel. Gold and silver would eventually peak at $850 and $50 an ounce, respectively.

Fed Officials Open to Additional Easing
as They Monitor Risks to Economy
By Craig Torres - Bloomberg.com
Federal Reserve officials are staying open to further monetary easing this year as they monitor risks that threaten to move the economy further away from their mandate for stable prices and full employment.
Atlanta Fed President Dennis Lockhart told reporters Jan. 9 that he hadn’t closed out "the option" for more stimulus, while New York Fed President William C. Dudley said in a Jan. 6 speech that it’s "appropriate" to evaluate whether the Fed could do more to boost growth. Both are voting members of the Federal Open Market Committee.

Fed pushes for government action to help revive housing
Ideas include big roles for Freddie, Fannie
By Patrice Hill-The Washington Times
Top Federal Reserve officials are prodding theWhite House and Congress to take more aggressive action to stop the free-fall in the housing market, warning that the U.S. economy will remain sluggish and vulnerable and will not fully recover until housing returns to better health.
Having failed to revive the housing market from its deep slump by driving interest rates to record lows and taking the unprecedented step of buying up many of the country’s mortgages, Fed officials have concluded that vigorous action by the executive branch is needed to overcome legal and institutional obstacles to a recovery.

Wholesale Prices in U.S. Unexpectedly Decrease
as Inflation Remains Tame
By Shobhana Chandra - Bloomberg.com
Wholesale prices in the U.S. unexpectedly dropped in December, consistent with the Federal Reserve’s assessment that inflation remains tame.
The producer price index fell 0.1 percent, the second decrease in the past three months, Labor Department figures showed today in Washington. Economists projected a 0.1 percent gain, according to themedian estimate in a Bloomberg News survey. The core measure excluding volatile food and energy rose 0.3 percent as the cost of light trucks climbed.

Few U.S. Cities Recoup Jobs in Recovery
By William Selway - Bloomberg.com
More than 90 percent of U.S. metropolitan areas have failed to recoup the jobs lost during the recession that ended in 2009, a report found, underscoring the slow pace of recovery by urban economies.
Only 26 of 363 U.S. metropolitan areas have seen employment rebound to pre-recession peaks, according to the report, prepared by forecaster IHS Global Insight and released by the U.S. Conference of Mayors today. Nearly 80 areas aren’t expected to see such a recovery for more than five years.

For a jobless, struggling South Carolina man,
reality isn’t a political debate
By Eli Saslow - WashingtonPost.com
CONWAY, S.C. — He awoke to his alarm on Monday morning at 6, just like always, even though his handwritten schedule for the day read only: "Find something to do!" Steven Murdock, 39, poured himself a cup of coffee and rummaged through the defrosted Thanksgiving leftovers in an otherwise barren refrigerator. He grabbed the phone that bill collectors were threatening to turn off and made his first call of the day.
"I need some kind of odd job to help me get by," he told a neighbor. "Know of anything?"

This Is America Today, Part I
By Gonzalo Lira
A true story: A fifty-ish woman I know was diagnosed with breast cancer. Dutifully, she and her husband contacted their insurance company to start the process of paying for her medical bills.
But lo and behold, the insurance company started dragging its feet—then tried to claim the woman’s breast cancer was a "pre-existing condition".

CBO Report:
Medicare Pilot Programs
Don't Control Health-Care Costs
By Megan McArdle - TheAtlantic,com
I was always skeptical of the projections that ObamaCare would reduce the budget. In fact, I made somecounter-predictions of my own. The cuts needed were very deep, and likely to be politically difficult; the benefits claimed in terms of actual improving health or even personal finances had been far too large.

Soros's friend in the Oval Office does him a favor
By Ed Lasky - AmericanThinker.com
The Wall Street Journal has an opinion column noting that Barack Obama has done an about face and now seems to be boosting the prospects of natural gas (especially that derived from shale gas fields). The White House has released a report that notes the important role that shale gas has played in helping to spark job and industrial growth. The White House mentions the Marcellus Shale in Pennsylvania as playing an especially important role:

Income Mobility
Means Some People Have to Lose Everything
By Megan McArdle - TheAtlantic.com
Like Ross Douthat, I've been following the recent blog conversation about income inequality and income mobility. I'm not going to summarize the arguments about how closely they're connected--you should read Ross's excellent post for a good overview. And I'm certainly not going to insert myself into an argument between two very smart economists who spend a lot of time studying this question. But I was struck by a very troubling thought while I was reading through these debates: only one of these problems matters, and it's the problem that we can't solve. No, strike that. I'm not sure whether the problem can be solved or not. What I am very sure of is that we do not want to solve it, and that for that reason, we are very probably not going to.

The Story Behind the SOPA Blackout
The entertainment industry usually gets its way in DC—but it was no match for Reddit, Wikipedia, and BoingBoing.
—By Siddhartha Mahanta and Nick Baumann - MotherJones.com
Only two American industries have ever had the clout in Washington to force Congress to ban Wall Street from trading futures on their products. The first was onions—futures trading in no one's favorite root vegetable was banned in the 1950s after farmers protested that Chicago speculators were manipulating prices. The other ban is more recent: In 2010, at the urging of the Motion Picture Association of America, one of Capitol Hill's most powerful lobbies, Congress banned movie futures as part of the Dodd-Frank financial regulatory reform bill.

* * * * *

New bill readied in congress
OPEN ready to take on SOPA in Congress
Piracy legislation opponents ready alternative amid web protests
By Robert Schroeder, MarketWatch
WASHINGTON (MarketWatch) — Lawmakers opposed to the Internet anti-piracy legislation known as SOPA and PIPA said Wednesday they are preparing to introduce an alternative bill as as soon as possible that they say takes a more-targeted approach to combating piracy and protects free speech.
Rep. Darrell Issa, a California Republican, and other House members were readying their Online Protection and Enforcement of Digital Trade (OPEN) Act, a spokeswoman said, on the same day that Wikipedia and other websites are darkened in protest of SOPA, which stands for the Stop Online Piracy Act, and PIPA, the Protect Intellectual Property Act.

Internet Rejoices: SOPA Is at Death's Door
The hated anti-piracy bill may end up in the dustbin, but other threats to a free and open Internet remain live in Congress.
By Rebecca J. Rosen - TheAtlantic.com
SOPA is not dead, yet, but it's dying. On Friday, Lamar Smith of Texas agreed to remove the controversial DNS-blocking provision from the House bill, of which he is the author. Later that day, the White House released its own statement criticizing the legislation. Though the White House stopped short of saying it would veto the bill, it attacked the two bills for much of the same things that have shocked open-Internet advocates at places such as the Electronic Frontier Foundation, Wikipedia, BoingBoing, and Reddit. And on Saturday, Darrell Issa, one of the leading opponents of the bill and the chair of the committee where it's been in mark-up, announced that Wednesday's hearings were canceled and that he had been assured by House majority leader Eric Cantor that SOPA would be shelved for the time being. As Brad Plumer writes inThe Washington Post, "The momentum on online piracy legislation is shifting dramatically."

Supporters of SOPA, PIPA stick to their guns
Widespread online protests dismissed as political stunts
By Jaikumar Vijayan - Computerworld.com
Computerworld - Beleaguered supporters of two online antipiracy bills today downplayed widespread protests against the legislation and insisted the opposition is misguided and misinformed.
Supporters of the Stop Online Piracy Act (SOPA) and the Protect IP Act (PIPA) labeled today's protests by Google, Wikipedia, Reddit and others as political stunts that contribute little to the debate around the pros and cons of the two bills.
One example is the U.S. Chamber of Commerce, which has been a vocal supporter of antipiracy legislation.

Why Google and Twitter didn't join the SOPA blackout
Wikipedia, Reddit, and other sites are blacked out in protest of the SOPA anti-piracy bills. Why didn't Google and Twitter join the blackout?
By Sarah McBride and Jasmin Melvin - CSMonitor.com
SAN FRANCISCO
A blackout Wednesday to protest against proposed legislation on online piracy has failed to get the full support of the biggest Internet players.
Despite calls for sites such as Google, Facebook,Twitter and other big names to join the blackout, the biggest participants are the online encyclopediaWikipedia and the social-news website Reddit.

The SOPA Blackout Created a Big Problem
By Alexis Madrigal - TheAtlantic.com
My connections in the technology world are nearly universally opposed to SOPA. They (i.e. we) see it as a threat to the open Internet. Hollywood and the music companies say there is nothing to fear from this legislation. Yet most independent analysts and the organizations that would have to comply with the law say that it creates serious problems.
To protest SOPA, many Internet companies -- as you no doubt have seen or heard by now -- have blacked out their websites. I've seen Internet watchers go back and forth about the usefulness of the current blackout protest. Two tweets stand-in for a whole lot of others:

The Sopa blackout protest makes history
An unprecedented wave of online opposition to the Sopa and Pipa bills before Congress shows the power of a free internet
By Amy Goodman - Guardian.co.uk
Wednesday 18 January marked the largest online protest in the history of the internet. Websites from large to small "went dark" in protest of proposed legislation before the US House and Senate that could profoundly change the internet. The two bills, Sopa in the House and Pipa in the Senate, ostensibly aim to stop the piracy of copyrighted material over the internet on websites based outside the US. Critics – among them, the founders of Google, Wikipedia, the Internet Archive, Tumblr and Twitter – counter that the laws will stifle innovation and investment, hallmarks of the free, open internet. The Obama administration has offered muted criticism of the legislation, but, as many of his supporters have painfully learned, what President Barack Obama questions one day, he signs into law the next.

Supreme Court Says Congress
May Re-Copyright Public Domain Works
By David Kravets - Wired.com
Congress may take books, musical compositions and other works out of the public domain, where they can be freely used and adapted, and grant them copyright status again, the Supreme Court ruled Wednesday.
In a 6-2 ruling, the court said that, just because material enters the public domain, it is not "territory that works may never exit."

Warning Signs That We Should Prepare For The Worst
TheEconomicCollapseBlog.com
The warning signs are all around us. All we have to do is open up our eyes and look at them. Almost every single day there are more prominent voices in the financial world telling us that a massive economic crisis is coming and that we need to prepare for the worst. On Wednesday, it was the World Bank itself that issued a very chilling warning. In an absolutely startling report, the World Bank revised GDP growth estimates for 2012 downward very sharply, warned that Europe could be on the verge of a devastating financial crisis, and declared that the rest of the world better "prepare for the worst." You would expect to hear this kind of thing on The Economic Collapse Blog, but this is not the kind of language that you would normally expect to hear from the stuffed suits at the World Bank. Obviously things have gotten bad enough that nobody is even really trying to deny it anymore. Andrew Burns, the lead author of the report, said that if the sovereign debt crisis gets even worse we could be looking at an economic crisis that could be even worse than the last one: "An escalation of the crisis would spare no-one. Developed- and developing-country growth rates could fall by as much or more than in 2008/09." Burns also stated that the "importance of contingency planning cannot be stressed enough." In other words, Burns is saying that it is time to prepare for the worst. So are you ready?

How Will The Shocking Decline Of Christianity In America Affect The Future Of This Nation?
EndOfTheAmericanDream.com
Is Christianity in decline in America? When you examine the cold, hard numbers it is simply not possible to come to any other conclusion. Over the past few decades, the percentage of Christians in America has been steadily declining. This has especially been true among young people. As you will see later in this article, there has been a mass exodus of teens and young adults out of U.S. churches. In addition, what "Christianity" means to American Christians today is often far different from what "Christianity" meant to their parents and their grandparents. Millions upon millions of Christians in the United States simply do not believe many of the fundamental principles of the Christian faith any longer. Without a doubt, America is becoming a less "Christian" nation. This has staggering implications for the future of this country. The United States was founded primarily by Christians that were seeking to escape religious persecution. For those early settlers, the Christian faith was the very center of their lives, and it deeply affected the laws that they made and the governmental structures that they established. So what is the future of America going to look like if we totally reject the principles that this nation was founded on?

Fukushima Radiation Spreads Worldwide
George Washington's Blog
California, Finland, Canada, Australia Hit By Radiation
The University of California at Berkeley detected cesium levels in San Francisco area milk above over EPA limits … and even higher than they were 6 months ago.
Finnish public television says that cesium from Fukushima has been detected in lichens, fungi and elk and reindeer meat in Finland.
The Australian Radiation Protection and Nuclear Safety Agency confirmed a radiation cloud over the East Coast of Australia.

Islam with Chinese Characteristics
China's bold but chimerical quest
for soft power in the Islamic world
By Massoud Hayoun - TheAtlantic.com
Arriving at a Guangzhou construction site on assignment for a Chinese newspaper in the summer of 2010, I was surprised to find a ruby-red mosque that looked more like a palatial Buddhist pagoda than anything I'd seen in the Middle East. Islam has deep roots in Chinese history, and is believed to have arrived in China with Saad ibn Abi Waqqas, the Prophet Mohamed's uncle, whom locals say was entombed in 664 AD in a dimly lit, musky hut not far from the newly constructed Chinese mosque.
The local government, devoted to the secular principle of Socialism with Chinese Characteristics that guides today's China, contributed 15 million yuan ($2.4 million), roughly 90 percent of the overall building costs for the mosque, according to Muslim community figures.

China's property price slide gathers speed
Property prices are falling at an accelerating rate across China and unsold inventories have reached the highest level in recent history, raising concerns monetary tightening may have gone too far.
By Ambrose Evans-Pritchard - Telegraph.co.uk
Average prices fell 0.3pc in December from a month earlier, the third successive fall. The National Bureau of Statistics recorded declines in 53 of China's 70 biggest cities. Used homes in Wenzhou dropped at an annualised rate of 45pc.
"Today's report is consistent with the unambiguously deteriorating trends seen in property sales, construction, starts and investments. The data just turned from bad to worse," said Wei Yao from Société Générale.

Red lines in the Strait of Hormuz
By George Friedman - ATimes.com
The United States reportedly sent a letter to Iran via multiple intermediaries last week warning Tehran that any attempt to close the Strait of Hormuz constituted a red line for Washington.
The same week, a chemist associated with Iran's nuclear program was killed in Tehran. In Ankara, Iranian parliamentary speaker Ali Larijani met with Turkish officials and has been floating hints of flexibility in negotiations over Iran's nuclear program.

Why Regime Change Won't Work in Iran
By Robert Wright - TheAtlantic.com
One of the most popular things on the Republican campaign trail--possibly more popular than any of the candidates themselves--is regime change in Iran. Mitt Romney favors it, Rick Santorum favors it, and Newt Gingrich even has a plan for doing it: "cutting off the gasoline supply to Iran and then, frankly, sabotaging the only refinery they have."
Give these guys some credit: At least they don't suffer from the common illusion that a few days of bombing will lastingly set back Iran's nuclear program. Unfortunately, the idea that regime change would do the job isn't much more reality-based.

The myth of an "isolated' Iran
By Pepe Escobar - ATimes.com
Introduction by Tom Engelhardt
These days, with a crisis atmosphere growing in the Persian Gulf, a little history lesson about the United States and Iran might be just what the doctor ordered. Here, then, are a few high- (or low-) lights from their relationship over the last half-century-plus:
Summer 1953: The Central Intelligence Agency and British intelligence hatch a plot for a coup that overthrows a democratically elected government in Iran intent on nationalizing that country's oil industry. In its place, they put an autocrat, the young Shah of Iran, and his soon-to-be feared secret police.

Why Russia is planning Iran war games
Russia has reportedly ordered the military to plan war games to deal with potential spillover from a US-Iran conflict.
By Fred Weir - CSMonitor.com
MOSCOW - As tensions ratchet up in the Persian Gulf, the Kremlin is signaling that it will use all its diplomatic influence to oppose war and, according to a leading Moscow newspaper, has ordered the military to prepare for any possible spillover from a conflict between Iran and the US into the sensitive post-Soviet Caucasus region.
Russia will block any further sanctions against Iran in the UN Security Council, a Foreign Ministry official said Tuesday, because it believes rising tensions could trigger a conflict that would destabilize the wider region. Last week Russian deputy prime minister and former ambassador to NATO Dmitry Rogozin warned that any Western attack on Iran would constitute "a direct threat to [Russian] national security."

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Wednesday 01.18.2012

Gold is the most favoured asset in 2012:
Nomura investor poll
Bullion Vault
A Survey of investors carried out by Japanese investment bank Nomura has found Buying Gold to be this year's number one investment choice.
The poll found that 19.5% of the 164 investors said they would Buy Gold and hold it to the end of the year. The next favourite assets were stocks and developed market investment grade corporate bonds, into which around 13% of respondents said they would invest money.

Central banks increase gold lending
First rise in a decade amid dollar liquidity squeeze
By Jack Farchy in London - FT.com
Central banks increased the amount of gold they lent for the first time in a decade in 2011, as they used their bullion reserves to help commercial banks raise US dollars.
Although central banks hold one-sixth of all the gold ever mined in their reserves, their activities in the bullion market are opaque, with not a single institution revealing its day-to-day operations. In addition to holding gold for their reserves, some central banks also trade the metal, lending it on the open market in order to obtain a yield.

Silver: How Iran can easily triple prices
and make you filthy rich
NEW YORK (Commodity Online): If the first year of the Iraq War of 2003 offers up some clues to the potential move in the Silver price following an invasion of its neighbour Iran, then grab as much of the white metal as you can and enjoy the ride. This ride could be for the record books
On the officially day of the U.S. invasion of Iraq on Mar. 20, 2003, silver traded at the lowly price of approximately $4.35. On the first anniversary of the invasion, the silver price reached nearly $8.00, for an 83 percent return (see graph, below).
But an attack on Iran could make an 83 percent return seem minuscule.

Why silver is better than gold?
By Ron Meyers
Warren Buffet once talked about how extraterrestrials who were watching earth would be thoroughly confused about how we handle gold. First, we dig the this yellow metal up out of the earth, melt it into shapes, and then lock it back under underground and guard it with machine guns! It largely makes no practical sense, and provides no real value to the world.
Interestingly, that's not at all the situation with silver, which is an industrial commodity. An industrial commodity is something that is used for the production of real goods in the world. In other words, it has more value than just sitting in a locked vault underground.

What the Next Decade Holds for Commodities
BY FRANK HOLMES - FinancialSense.com
What a decade! A rapidly urbanizing global population driven by tremendous growth in emerging markets has sent commodities on quite a run over the past 10 years. If you annualized the returns since 2002, you find that all 14 commodities are in positive territory.
A precious metal was the best performer but it’s probably not the one you were thinking of. With an impressive 20 percent annualized return, silver is king of the commodity space over the past decade with gold (19 percent annualized) and copper (18 percent annualized) following closely behind.

Back With a Vengeance: The EU Debt Crisis
By Arnold Ahlert - PatriotPost.us
On Friday the 13th, ratings agency Standard & Poor's (S&P) downgraded the credit status of nine European nations. The ratings of Cyprus, Italy, Portugal and Spain were lowered by two notches while Austria, France, Malta, Slovakia and Slovenia were lowered by one. Italy's rate cut from A to BBB+ reflects the second S&P downgrade since September 19th, and Portugal's debt has now reached "junk" status. "Today's rating actions are primarily driven by our assessment that the policy initiatives that have been taken by European policy makers in recent weeks may be insufficient to fully address ongoing systemic stresses in the euro zone," said S&P in a written statement.

Handful of questions remain on EU fiscal treaty
BY HONOR MAHONY - EUObserver.com
BRUSSELS - Finance ministers will next week tackle the thorny little details still to be agreed before EU countries can bless a new pact on fiscal discipline.
A fourth draft of the slim document - meant to copperfasten budgetary prudence in the EU - is to be circulated on Thursday (19 January), but most of the outstanding issues have been left for finance ministers to sort out in the hope the pact will be ready in time for an end-of-the-month EU summit.

S&P warns that Greece will default very soon
NEW YORK (Commodity Online): Standard&Poor's believes that the Greek default is very imminent. The S&P had last week downgraded 9 Eurozone nations including France, Spain and Italy. In fact, Italy's credit rating was downgraded from A to BBB+
In an interview with Bloomberg, Moritz Kraemer of S&P says that the ratings agency expects Greece to default "very shorty"

Hungary faces ruin as EU loses patience
The European Commission has launched legal action against Hungary's Fidesz government for violations of European Union treaty law and erosion of democracy, marking a dramatic escalation in the war of words with the EU's enfant terrible.
By Ambrose Evans-Pritchard - Telegraph.co.uk
Hungary's defiant premier Viktor Orbán has no hope of securing vital funding from the EU and the International Monetary Fund until the dispute is resolved, leaving him a stark choice of either bowing to EU demands or letting his country slide into bankruptcy.
Yields on Hungary's two-year debt jumped to 9.17pc on Tuesday, an unsustainable level for an economy in recession with public debt of near 80pc of GDP. Hungary's debt was cut to junk status by rating agencies last week.

EU commission starts legal action against Hungary
BY NIKOLAJ NIELSEN - EUObserver.com
BRUSSELS - The European Commission has launched legal action against Hungary over its new constitution, amid fears that its right-wing leader has too much control of judges and the central bank.
Speaking to journalists in Strasbourg, EU commission chief Jose Manuel Barroso said on Tuesday (17 January) that the independence of the central bank, the national data protection authority and the early retirement age of judges as outlined in the constitution do not conform to EU standards.

Fitch says Greece to default, believes will be orderly
(Reuters) - Rating agency Fitch said on Tuesday that Greece would default on its debt, although it said that such a default was likely to take place in an orderly manner.
"It is going to happen. Greece is insolvent so it will default," Edward Parker, Managing Director for Fitch's Sovereign and Supranational Group in Europe, the Middle East and Africa told Reuters on the sidelines of a conference in the Swedish capital.
"So in that sense it shouldn't be a surprise to anyone."

Greek haircut is necessary evil, EU commissioner says
BY VALENTINA POP - EUObserver.com
BRUSSELS - The EU may have been wrong in asking private investors to write off Greek debt but it is too late to change track now, EU competition commissioner Joaquin Almunia has said.
The Spanish economist made the remarks at a debate hosted by the European Policy Centre, a Brussels-based think tank, on Monday (16 January) - two days before Greek negotiators were supposed to fly to Washington to restart talks on the so-called 'haircut.'

Greek debt talks to resume Wednesday in Athens
By Renee Maltezou
(Reuters) - International creditors said on Tuesday they are coming back to the negotiating table with Greece to resume talks that broke down last week on a debt swap plan crucial to Athens' chances of avoiding a messy bankruptcy.
Debt-choked Greece needs a deal with private bondholders very soon on how much financial pain they are willing to bear to persuade the EU and IMF to extend a new bailout and keep the state afloat when a big bond redemption comes due in late March.

Vulture Funds Profit Off Greek Misery
by NICK DEARDEN - CounterPunch.0rg
The hamstrung negotiations over a new Greek bail-out recommence tomorrow with little sign of resolution. As the Greek economy suffers from rapidly rising unemployment and debt levels, and its people experience rises in rates of suicide, murder and HIV, big profits still stand to be made or lost. The financial sector which has destroyed Greek democracy continues to hold the country down as it demands rich pickings.
The European Union has told Greece that another bail-out will only go ahead if Greece can persuade private sector holders of Greek debt to accept a voluntary reduction in their claims on the country. They are looking to a 50% reduction, although the International Monetary Fund has suggested – correctly – that even this will not be nearly enough this late in the game.

Portugal moves into default territory
By David Oakley
Portugal is trading in default territory after investors offloaded the country’s bonds this week amid rising fears of contagion. Worries are mounting that the private sector and Greece will fail to agree a restructuring package for Athens' debt.
Many investors were also forced to sell Portuguese bonds after Standard & Poor’s downgraded the country to junk on Friday. Other funds sold Portuguese debt after Lisbon was removed from Citigroup’s European Bond Index, which these investors track, because of its fall to junk status.

Final Battle for the Euro Will Be Fought on Italy’s Shores
BY EDWARD ALTMAN PHD - FinancialSense.com
For over two years, we have witnessed the economic demise of certain European countries. This soon led to the financial community systematically assessing the health of several peripheral southern European countries, followed by tumbling investment grade ratings and spikes in required rates of return on the government debt of these sovereigns. As the European Central Bank continues to dole out rescue packages, many are now looking for the next country to suffer a financial attack and wondering if the euro will even survive.

When, oh when, will Europe face the truth?
Countries with a triple-A credit rating are becoming an endangered species.
By Jeremy Warner - Telegraph.co.uk
Before the crisis, most advanced economies boasted this top-notch stamp of external approval. Erroneously, as we now know, there were also thousands of structured products similarly beatified by the rating agencies.
Many of the structured products quickly became junk in the credit crunch, and with last week's French downgrade, the number of top-rated countries has shrunk to just 14.
Of the four eurozone members that still belong to this exclusive club of apparently "risk-free" debtors, three are on negative watch.

Expect Recession in 2012
BY JOHN MAULDIN - FinancialSense.com
The "Quarterly Review and Outlook" from Hoisington Investment Management is one of the most significant pieces that crosses my desk – I try and drop everything else as soon as possible. This quarter's is no exception. The authors, Dr. Lacy Hunt and Van Hoisington, get right down to brass tacks with their opening sentence: "As the U.S. economy enters 2012, the gross government debt-to-GDP ratio stands near 100%." They cite an influential 2010 historical study of high-debt-level economies around the world, by Professors Kenneth Rogoff and Carmen Reinhart, that concluded that when a country's gross government debt rises above 90% of GDP, "median growth rates fall by one percent, and average growth falls considerably more."

Citigroup latest Wall Street bank to disappoint as profits fall 11%
Revenue at US's third largest bank fell as the European debt crisis took its toll, investment banking slumped and growth in lending slowed
By Dominic Rushe in New York - Guardian.co.uk
Citigroup reported an 11% drop in fourth-quarter profits on Tuesday, well below analysts' forecasts, becoming the latest Wall Street bank to post disappointing results.
Revenue at the US's third largest bank fell 7% as the Eurozone debt crisis took its toll on trading, investment banking slumped and growth in lending slowed.

The world according to Goldman Sachs
Ahead of the Davos summit, Goldman Sachs president Gary Cohn talks to The Sunday Telegraph about the outlook for Europe, the US economy and whether 2012 holds any rays of hope.
By Kamal Ahmed - Telegraph.co.uk
For the headquarters of one of the biggest banks in the world, the outside of 200 West Street is deliberately anonymous. Outside, guards patrol in the freezing air and the pavement bollards, masquerading as decorative street furniture, are the type of urban landscaping designed to prevent a terrorist attack. If any reminder were needed, from the upper floors there are views of the reflecting pools that mark Ground Zero.

Ron Paul On The Dylan Ratigan Show
About Debt Ceiling & The Fed

Is China Really Funding the US Debt?
By Barry Ritholtz - Ritholtz.com
I keep hearing people erroneously claim that China is funding US deficit spending. It seems that every eejitwith a fundamental misunderstanding of mathematics (and access to Xtranormal‘s animated talking bears) has been pushing this concept.
It turns out to be only partially true — and by partially, I mean 7.5% true. But that means the statement is 92.5% false.

Decentralization Is The Only Plausible Economic Solution Left
Brandon Smith - Alt-Market.com
When I first began the process of launching the Alternative Market Project, the idea and scope were rooted in analytical papers I had written years before on aspects of centralization versus decentralization, and globalization versus localization. Back then, I saw these conflicting economic systems as mutually generative. That is to say, the further we as a society are pushed towards collectivist or feudalist economic structures, the more we naturally or unconsciously gravitate towards independent and open markets. The problem today is that independent markets have been artificially and quite deliberately removed from the public view. As I have said in the past, centralization is a powerful tool for elitists, because it allows them to remove all choice from a system until the only options left to the people are those that the establishment desires. Though we deeply long for free and vibrant trade unhindered by corporate oligarchy, we are told that such a thing does not exist, and that we must make due with the corrupt ramshackle economy we have been given. I say, this is simply not so…

Half of U.S. Households Took Government Benefits in 2010
Is this statistic a watershed mark of our decline into socialism, a totally reasonable outcome from the Great Recession, or, somehow, both things at the same time?
By Derek Thompson - TheAtlantic.com
A record-high 49% of the population lived in a household receiving some type of government benefit in the second quarter of 2010, according to Census data reported by the Wall Street Journal. Most of this group received so-called "means tested" benefits like food stamps, subsidized housing or Medicaid. Many are also benefiting from unemployment insurance spending, which has quadrupled since the downturn.

The Worst Economic Recovery Since The Great Depression
By Peter Ferrara - Forbes.com
The record of President Obama’s first three years in office is in, and nothing that happens now can go back and change that. What that record shows is that President Obama, with his throwback, old-fashioned, 1970s Keynesian economics, has put America through the worst recovery from a recession since the Great Depression.

Saving the American Safety Net
by GERALD SCORSE - CounterPunch.org
If raising the retirement age can save Social Security, the nation owes huge thanks to Ronald Reagan and Alan Greenspan. They raised it a generation ago, and retiring at 65 with full benefits is now history.
The rise to 66, where it is today—and a scheduled rise to 67—were buried in plain sight in the Social Security overhaul of 1983. President Reagan had set up a commission, chaired by Greenspan, to put the system on sound fiscal footing. Almost unthinkable in today’s Washington, the panel became a model of bi-partisanship. Its report formed the core of a bill that Congress approved overwhelmingly.

What Does One Jobless Youth Cost Taxpayers?
$14,000 a Year
With 6.7 million American youth out of work and out of school, the country faces a fiscal time bomb, according to a new report
By Jordan Weissmann - TheAtlantic.com
America's youth are suffering their worst employment drought since World War II. It doesn't take a great leap of the imagination to understand why this is a crisis. The young and jobless earn less later in life. They lose the chance to build crucial career skills. They rely on government support. They're more likely to commit crimes.
And according to a new report, the worst off are sapping roughly $40,000 a year from the economy while costing the government $14,000 in taxes.

Jerry Yang resigns from Yahoo
Jerry Yang, Yahoo's co-founder, has stepped down from his position on the company's board after 16 years
By Charles Arthur, technology editor - Guardian.co.uk
The end of an internet era has come with the resignation of Jerry Yang, the 43-year-old co-founder of Yahoo, from his position on the company's board after 16 years.
Yang's reign as chief executive, between June 2007 and January 2009, included the disastrous decision – from Yahoo shareholders' point of view – to reject a $44.6bn (£29.1bn) takeover offer from Microsoft in February 2008, which priced the company at a 50% premium on its share price at the time.

LIQUID SILVER USED TO PRINT ELECTRONIC CIRCUITS
Analysis by Jesse Emspak - Discovery.com
Printing electronics just got a boost from the University of Illinois, where the latest in electric inks has been made from silver.
Jennifer Lewis, a professor of materials science and engineering, and graduate student S. Brett Walker described the new ink in the Journal of the American Chemical Society. Most inks for printing electronics have metallic particles in them. This ink is all liquid -- a solution of silver and ammonia. When printed, the liquid evaporates, leaving a trail of conductive material.

The idea of free trade only works in the academic world (Part1)
An alternative vision of trade in the 21st century
RICHARD SMITH - FNA
The topic ‘International Trade – New Challenges’ was of one of the panels at the World Leather Congress recently held in Rio de Janeiro on November 9th 2011. What was interesting was that the subject of “trade” had come up during the World Footwear Congress held at the same venue two days earlier. In a nutshell there was no agreement on trade – free or fair - between presenters representing developed and developing nations.

The idea of free trade only works in the academic world (Part 2)
An alternative vision of trade in the 21st century
RICHARD SMITH - FNA
International Trade has to be taken out of its traditional vacuum and linked directly to manufacturing procedures – and by this I mean that trade has to be linked to sustainable or environmental manufacturing.
Trade is ubiquitous and for this reason it is already implicitly linked to environmental concerns. Toxic financial products have endangered the global financial system and we must not allow toxic consumer goods to do the same to the global environment. With the world population expected to reach 9.3 billion by 2050 sustainable practices will become even more important since, without a healthy environment living creatures, including man, will not be able to survive longer term.

Keiser Report: Economics of Suicide (E237)

Europe’s Airbus tops U.S-based Boeing
with top sales total of ‘11
By Tim Devaney-The Washington Times
In a battle of aerospace giants, Europe’s Airbus bested Chicago-based Boeing in 2011 with more sales, as the two rivals continue to dominate the industry.
The European planemaker drew 1,419 new orders and made 534 deliveries, compared withBoeing’s 805 new orders and 477 deliveries. Both companies had record years.

New space-arms control initiative draws concern
Critics say military activities will be compromised
By Bill Gertz - Special to The Washington Times
The Obama administration is launching a new space arms-control initiative that critics say will lead to restrictions on U.S. military activities in space, a key U.S. strategic war-fighting advantage.
Secretary of State Hillary Rodham Clinton is expected to announce the initiative as early as Tuesday. The plan will be built on work contained in a European Union draft code of conduct for space that the Pentagon and State Departmenthave criticized as too restrictive.

Edible Microchips, Biometric Identity Systems
And Mind Reading Computers
EndOfTheAmericanDream.com
As technology continues to advance at an exponential rate, will we someday find ourselves living in a "scientific dictatorship" where virtually everything that we do, say and think is monitored and controlled by technology? To many of you that may sound like a wild assertion, but just keep reading. Our world is changing faster than ever before, and scientists have some absolutely wild things planned for our future. As you read this, they are feverishly developing edible microchips, cutting edge biometric identity systems, and mind reading computers. Many futurists envision a world where someday nearly all humans are embedded with microchips and have thousands of tiny nanobots living inside of them. The idea is that we can "take control of our own evolution" and use technology to "improve" humanity. But very few of those futurists address the potential downsides. The truth is that all of this technology could one day be used by a totalitarian government to establish a dystopian nightmare where nobody has any liberties and freedoms whatsoever.

Web Piracy Bill Faces Fiercer Fight
Media Companies Lose Ground as White House Sides With Internet Firms; Wikipedia Plans Protest
By AMY SCHATZ - WSJ.com
WASHINGTON—Supporters of controversial antipiracy legislation face a struggle to regain momentum after the White House sided with irate Internet companies and users over the weekend and complained that the proposal could hurt innocent companies and undermine cybersecurity.
On Saturday, the White House outlined its opposition to two similar bills pending in the House and Senate that would crack down on the sale of pirated American movies, music and other goods on foreign-based websites. The bills would require Internet companies to hobble access to foreign pirate websites, bar search engines from linking to them and prevent U.S. companies from placing ads on them.

Time for a Royalty System for Aggregators?
As the demand for digital news -- via aggregation -- continues to increase, the supply is decreasing. Maybe we should charge companies that aggregate content to reinvigorate the industry.
By Peter Osnos - TheAtlantic.com
After years of reeling from the impact of Internet-based competition on revenues, major news organizations are embarked on a variety of initiatives they hope (or better yet, expect) will finally recoup some of what has been lost. For anyone in the field, there is a growing vocabulary for strategists to master: paywalls, metering, micropayments, and mobile subscriptions, among others. With so much energy and enterprise devoted to reversing the downward spiral, there is a reasonable chance that 2012 could mark the start of a turnaround for some companies.

Recovery at risk as Americans raid savings
By Jilian Mincer and Jonathan Spicer
(Reuters) - More than four years after the United States fell into recession, many Americans have resorted to raiding their savings to get them through the stop-start economic recovery.
In an ominous sign for America's economic growth prospects, workers are paring back contributions to college funds and growing numbers are borrowing from their retirement accounts.

Kraft Foods to Cut 1,600 Jobs
Ahead of Plan to Split in Two
David Welch - Bloomberg.com
Jan. 17 (Bloomberg) -- Kraft Foods Inc., the food company planning to split in two this year, said it would eliminate 1,600 jobs and reported preliminary profit for 2011 that trailed some analysts’ estimates.
The job cuts will take place in North America through this year and about 40 percent are a result of reorganizing U.S. sales, the Northfield, Illinois-based company said today in a statement. About 40 percent of the cuts will come from corporate staff and 20 percent are vacancies that will remain unfilled, the company said.

The sordid details of the employment market – Before recession hit 5,000,000 job openings were available while today there are 3,000,000. 1,000,000 Americans have completely quit looking for work and average duration of unemployment is 40 weeks, twice the amount of the 1980s recession.
MyBudget360.com
There is a growing disconnect in America as the middle class is hollowed out. Many Americans hear talks of a recovery that is now going on three years but look at their tight monthly budgets and wonder what recovery is being discussed. The median household income is roughly $50,000 and with rising food, healthcare, energy, and college costsmany are left with little each month once the basics are paid for. And that is the core of the issue. The typical American family is seeing their paycheck devoured by items that are used on a daily basis. The employment situation is tenuous at best. We still have a peak in discouraged workers. Roughly 1,000,000 Americans have simply stopped looking for work since the recession hit. These are people willing and able to work but have given up in the current economy. We are adding jobs and many are in the lower paying service sectors. What is meant by a recovery?

Wisconsin governor facing recall
after workers collect 1m petition signatures
Republican Scott Walker could be forced to defend his seat in a special election after workers objected to his union-busting measures
AP - Guardian.co.uk
Opponents of Wisconsin's Republican governor Scott Walker, who championed a law last year curbing the rights of public sector unions, have submitted what they say is enough signatures to force a special election to try to remove him from office.

Arab Justice for Arab Violence
Aryeh Neier - Project-Syndicate.org
NEW YORK – For months now, it has been clear that no peaceful, even satisfactory, resolution of the conflict in Syria is possible without external intervention. Paradoxically, too many Syrian civilians have been tortured, wounded, and killed to stop the demonstrations seeking the ouster of President Bashar al-Assad. The victims’ families, friends, and neighbors simply will not accept the Assad regime’s continuation in any form. So what will happen?

Blind Man’s Bluff in the Middle East
by BARRY LANDO - CounterPunch.org
In a perilous spiral of assassinations, threats and counter-threats, the leaders of Washington, Jerusalem and Tehran keep ratcheting the tension. What is most alarming about the situation, is that the principle players and their advisors are engaged in an incredibly dangerous three-way game of blind mans buff.
None of them expresses a real understanding of the others: of their motives, their concerns, nor their likely reactions. That’s true even with Israel and the United States: though the U.S. risks being sucked into any conflict between Israel and Iran, the Obama administration is currently forced to guess what its supposed Israeli allies are planning.

USA goes on rampage over Iran's Latin American ambitions
Pravda.ru
Last week, Iranian President Mahmoud Ahmadinejad made a week-long tour of Latin America. The Iranian leader visited Venezuela, Nicaragua, Cuba and Ecuador.
Ahmadinejad does not have many friends in the world. All of them, except for Syria, are in Latin America. Suffice it to say that it was his fifth visit to the region since 2007. Iran's friendship with ALBA states (the bloc incudes the above-mentioned countries) is based on common anti-American views and the fund of $200 billion, which was established to struggle against the American imperialism.

USA goes on rampage over Iran's Latin American ambitions
Pravda.ru
Last week, Iranian President Mahmoud Ahmadinejad made a week-long tour of Latin America. The Iranian leader visited Venezuela, Nicaragua, Cuba and Ecuador.
Ahmadinejad does not have many friends in the world. All of them, except for Syria, are in Latin America. Suffice it to say that it was his fifth visit to the region since 2007. Iran's friendship with ALBA states (the bloc incudes the above-mentioned countries) is based on common anti-American views and the fund of $200 billion, which was established to struggle against the American imperialism.

China: A country where no one is secure
All classes of people suffer when population deprived of opportunity
By Guo Yuhua - MarketWatch.com
BEIJING ( Caixin Online ) — What is the most common feeling in China today? I think many people would say disappointment. This feeling comes from the insufficient improvement in their lives that people are achieving amid rapid economic growth. It also comes from the contrast between the degree to which individual social status is rising and the idea of the "rise of a great and powerful nation."
One phenomenon is a good example of such disappointment: A group of young college graduates "escaping and returning" to Beijing, Shanghai and Guangzhou.

China's Dilemma on Iran
Is the threat of an Israeli air strike leading Beijing to consider other sources of energy?
By Max Fisher - TheAtlantic.com
Chinese Prime Minister Wen Jiabao is on a six-day trip to three of the Middle East's major oil producers: Saudi Arabia, Qatar, and the United Arab Emirates. All three are close U.S. allies; a Chinese Prime Minister has not visited Saudi Arabia in two decades. But the biggest news here may be the Middle Eastern energy exporter he isn't visiting: Iran, China's third-greatest source of oil. There's no reason to believe that the China-Iran relationship is ending, but this is another indication that China's interest in dealing with Iran may be waning. If that happens, it would do wonders for America's containment strategy, and Washington might have Israel -- and perhaps Tehran itself -- to thank.

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Tuesday 01.17.2012

US and Iran inch closer to military conflict
By Jeremy Herb - TheHill.com
The likelihood of military conflict between the United States and Iran is higher now than at any time in more than two decades, military analysts say, as tensions continue to escalate over Iran’s nuclear ambitions and blustery rhetoric.
While full-blown war might not be on the immediate horizon, the conditions for military skirmishes are as ripe as they’ve been since 1988, when Iran laid mines against U.S. ships in the Persian Gulf and the United States destroyed Iranian oil platforms in response.

U.S. Troops Quietly Surge into Middle East
By David S. Cloud, Tribune Co. - SFGate.com
Washington -- The Pentagon has quietly shifted combat troops and warships to the Middle East after the top American commander in the region warned that he needed additional forces to deal with Iran and other potential threats, U.S. officials said.
Marine Corps Gen. James Mattis, who heads U.S. Central Command, won White House approval for the deployments late last year after talks with the government in Baghdad broke down over keeping U.S. troops in Iraq, but the extent of the Pentagon moves is only now becoming clear.

GOP lawmaker warns Iran must be stopped,
Israel is 'one-bomb country'
By Jonathan Easley - TheHill.com
Rep. Steve Southerland (R-Fla.) said Iran must be stopped from obtaining even one nuclear warhead because Israel is a "one-bomb country."
Southerland was making the case for why the United States must stand by Israel amid escalating tensions with Iran and worries about that country’s nuclear program. Many U.S. lawmakers believe Iran’s nuclear ambitions are aimed at building a bomb that could be used against Israel.

Steve Southerland, Israel is "A one bomb nation"

Could Iran Close the Strait?
By Stephen Bryen and Shoshana Bryen - AmericanThinker.com
During the Iran-Iraq war of the 1980s, the United States "reflagged" a number of Kuwaiti oil tankers passing through the narrow and dangerous Strait of Hormuz. The confidence inspired by that action encouraged other tankers to make the trip, and the U.S. Navy was the guarantor of millions of barrels of oil. Today the question of security for tankers in the Strait arises again, with Iran threatening to block the waterway.

Saudi Arabia doubts Iran oil blockade claim
By Ramin Mostafavi
(Reuters) - Saudi Arabia on Monday expressed doubts over Iran's claim it could block the main oil shipping route out of the Gulf and made clear it was ready to pump more oil after sanctions threatened to cut Iranian sales of crude.
Brent crude rose above $111 on concerns about global oil supplies if sanctions freeze OPEC's second biggest producer out of the market or push it towards military conflict, while Saudi Arabia said it would work to stabilize the price at $100.

Possible Implications of the Iranian Oil Embargo
Written by James Hamilton - OilPrice.com
As efforts continue to impose sanctions on Iran, I thought it would be helpful to discuss the possible implications of these developments for oil-consuming countries.
The most likely outcome of an embargo on oil purchased from Iran is that the countries participating in the embargo buy less oil from Iran while other countries not participating in the embargo buy more oil from Iran ([1], [2]). While this would produce some dislocations, if total world oil production doesn't change, it would have little effect on either Iran or oil-consuming countries, and would basically be a symbolic gesture.

Paul Craig Roberts:
"The US is driving the world to a nuclear war"
Obama has made it clear that China is a threat to the US in more ways than one. The countries are two of the world's largest economies, but some economists believe China's economy will surpass the US' economy in five years. Critics believe that is the motive behind President Obama's announcement to station 2,500 Marines in Australia. China considers the shift of power as an attempt to escalate military tension in the Asia-Pacific. Paul Craig Roberts, former Reagan Administration official and columnist, joins us to give us insight on whats going on between the US and China.

U.S. Warns Israel on Strike
Officials Lobby Against Attack on Iran
as Military Leaders Bolster Defenses
By ADAM ENTOUS, JULIAN E. BARNES and JAY SOLOMON - WSJ.com
WASHINGTON—U.S. defense leaders are increasingly concerned that Israel is preparing to take military action against Iran, over U.S. objections, and have stepped up contingency planning to safeguard U.S. facilities in the region in case of a conflict.
President Barack Obama, Defense Secretary Leon Panetta and other top officials have delivered a string of private messages to Israeli leaders warning about the dire consequences of a strike. The U.S. wants Israel to give more time for the effects of sanctions and other measures intended to force Iran to abandon its perceived efforts to build nuclear weapons.

Iran War is Only Matter of Time
By Greg Hunter’s USAWatchdog.com
Two weeks ago, Iranians were saved from pirates on their hijacked ship by the U.S. Navy. Last week, the U.S. military saved a sinking ship in the Persian Gulf. It’s too bad that will not be enough goodwill to stop the coming Iran war. Headlines in the last few weeks look like a stark warning for a coming conflict. The West, spearheaded by America, is putting into place tougher sanctions that will target Iran’s financial and oil interests. Tension has been increasing by the week over the nuclear program that Iran steadfastly claims is for the peaceful production of energy. New sanctions will be fully implemented in about six months.

Israel luring US into war with Iran

Gold and silver to regain shine in 2012
LONDON (Commodity Online): Gold and Silver to regain their shine during 2012, describing gold’s pullback from record highs during the latter part of 2011 as temporary weakness, said Commerzbank in a research note.

People don't buy gold to make money;
but buying because they have money
By Julian D. W. Phillips - CommodityOnline.com
Performance and Trading
You heard the saying, but what does it really mean? We live in a world where performance is stressed. Hedge funds can be measured on a monthly basis. Twenty percent charges on profits are levied by fund making their view short-term. Daily assessments are made, comparing one sector to another giving the impression that short-term performance is what it's all about. But is it? No it is not.

Why silver has hit rock bottom
P. Radomski - CommodityOnline.com
The new year started off with a bang with precious metals out-shining the competition. Is this a harbinger of things to come? We think so and we are not alone. Forecasts for Gold for 2012 include a price per ounce of $2,200 by Morgan Stanley, $2,050 by UBS, and $2,000 by Barclays.

Gold and energy bull charges on
Outstanding Investments still sees shortages
By Peter Brimelow, MarketWatch
NEW YORK (MarketWatch) — A gold and energy bull stumbled badly last year. But it’s charging on, in the same direction.
Outstanding Investments is still the top-performing investment letter over the past ten years among the 180-plus followed by the Hulbert Financial Digest, up a startling 18.1% annualized vs. 3.80% annualized for the dividend-reinvested Wilshire 5000 Total Stock Market Index.

The Dollar Centric Derivatives Complex:
Progenitor of Parasitic, Ponzi Price-Fixing
BY ROB KIRBY - FinancialSense.com
The term "derivative" has become a dirty, if not evil word. So much of what ails our global financial system has been laid-at-the-feet of this misunderstood, mischaracterized term – derivatives. The purpose of this paper is to outline the origin, growth and ultimately the corruption of the derivatives market – and explain how something originally designed to provide economic utility has morphed into a tool of abusive, manipulative economic tyranny.
Definition of Derivatives
Derivatives are financial instruments whose values depend on the value of other underlying financial instruments or objects. The main types of derivatives are futures, forwards, options and swaps.

Oil prices rise on Iran's threats to cut off Strait of Hormuz
Oil prices climbed 70 cents to $111.14 a barrel on Monday, after Iran issued fresh threats to cut off up to 17m barrels per day of oil supply from world markets by shutting down the Strait of Hormuz.
By Emily Gosden - Telegraph.co.uk
Iran warned its neighbours in the Gulf states that they should not attempt to make up for the shortfall if an embargo is imposed on its crude oil exports, and reiterated its threat that it could block oil transport on the Strait in response to sanctions.
State-run Iranian news agency Mehr reported that "no country" could cope with the shock of the Strait being closed.
But Saudi Arabia, the world's biggest oil producer, hit back, playing down the risk of disruption.

Greece sends officials to US as default fears grow
Greece has sent top officials to the US for talks with the International Monetary Fund as it returns to centre stage in the eurozone crisis over fears that a debt deal impasse with bondholders could trigger a messy default.
By Martin Strydom - Telegraph.co.uk
The Greek Prime Minister Lucas Papademos said on Monday he was confident agreement on a debt swap plan would be reached by the time eurozone finance ministers meet next Monday.
Greece has a €14.4bn bond maturing on March 20 that it can’t afford to pay in full.
A crucial second, €130bn rescue loan from the EU, IMF and ECB is dependent on reaching an agreement on a bond swap with creditors that are being asked to take a voluntary 50pc loss on their Greek government bonds.

Greek Debt Swap Faces 'Critical' Phase
as Talks Resume This Week
By Patrick Donahue and Aaron Kirchfeld - Bloomberg.com
The Greek government and its creditors return to the negotiating table this week to revive stalled talks on a debt swap as German Chancellor Angela Merkel places pressure on both sides to forge a deal.
Greek Finance Minister Evangelos Venizelos said two days ago that talks with the Institute of International Finance will resume on Jan. 18. The Washington-based IIF, which represents banks holding the bonds, said on Jan. 14 there is a "tentative plan" to return to Athens mid-week, "but this depends on developments over the next few days."

Eurozone's 'big bazooka' bail-out fund
is left in tatters by S&P downgrade
Plans for a €1 trillion "big bazooka" to stem the debt crisis were crushed on Monday night as Standard & Poor's stripped the European Financial Stability Fund (EFSF) of its AAA credit rating.
By Louise Armitstead - Telegraph.co.uk
The EFSF, which is tasked with supporting indebted countries, was itself hobbled as S&P gave it a AA+ rating, reflecting the downgrade of France and eight other eurozone countries on Friday.
As the standoff with Greece's creditors continued, Mario Monti, the Italian prime minister, pleaded for Germany and other creditor countries to help lower his country’s borrowing costs. He warned there would be a "powerful backlash" among voters in smaller EU countries if they did not.

S & P downgrades, dollar, debt, trade, the Fed

How Safe Are Central Banks?
UBS Worries The Eurozone Is Different
Submitted by Tyler Durden - ZeroHedge.com
With Fed officials a laughing stock (both inside and outside the realm ofFOMC minutes), Bank of Japan officials ever-watching eyes, and ECB officials in both self-congratulatory (Draghi) and worryingly concerned on downgrades (Nowotny), the world's central bankers appear, if nothing else, convinced that all can be solved with the printing of some paper (and perhaps a measure of harsh words for those naughty spendaholic politicians). The dramatic rise in central bank balance sheets and just-as-dramatic fall in asset quality constraints for collateral are just two of the items that UBS's economist Larry Hatheway considers as he asks (and answers) the critical question of just how safe are central banks. As he seesbloated balance sheets relative to capital and the impact when 'stuff happens', he discusses why the Eurozone is different (no central fiscal authority backstopping it) and notes it is less the fear of large losses interfering with liquidity provision directly but the more massive (and explicit) intrusion of politics into the 'independent' heart of central banking that creates the most angst. While he worries for the end of central bank independence (most specifically in Europe), we remind ourselves that the tooth fairy and santa don't have citizen-suppressing printing presses.

IMF: European outlook grim; high global risks
By Chester Yung
HONG KONG ( Dow Jones) -- The economic outlook for Europe is grim and the risks for the global economy are high amid the escalating euro-area crisis, posing challenges for Asia, International Monetary Fund First Deputy Managing Director David Lipton said Monday.
The IMF is planning to lower its global economic growth forecast for this year, Lipton said at a forum in Hong Kong.
Lipton said a rise in liquidity would help banks and sovereigns deal with the crisis, and called for more fiscal consolidation, though not at the expense of short-term growth, and more integration to ensure the viability and stability of the monetary union.

Fed Plays PR Games
BY JOHN BROWNE - FinancialSense.com
The world was taken by surprise recently by the Federal Reserve Board's announcement that it would publish some of its economic forecasting that forms the basis for its short-term interest rate strategy. The Fed claims that the move will vastly increase so-called transparency, which has become a buzz word for honesty and virtue. However, the new policies do nothing to remove the cloak of secrecy that conceals still many of its most significant activities. This myth of new transparency will do little to lure investors back into the markets but as an unintended consequence will reveal just how profoundly the markets are currently guided from the top.

How to Create a Depression
Martin Feldstein - Project-Syndicate.org
CAMBRIDGE – European political leaders may be about to agree to a fiscal plan which, if implemented, could push Europe into a major depression. To understand why, it is useful to compare how European countries responded to downturns in demand before and after they adopted the euro.
Consider how France, for example, would have responded in the 1990’s to a substantial decline in demand for its exports. If there had been no government response, production and employment would have fallen. To prevent this, the Banque de France would have lowered interest rates. In addition, the fall in incomes would have automatically reduced tax revenue and increased various transfer payments. The government might have supplemented these "automatic stabilizers" with new spending or by lowering tax rates, further increasing the fiscal deficit.

Gerald Celente - Jeff Rense Radio Show - 13 January 2012

Clearing houses: the next casualty of the crisis?
By Luke Jeffs
Jan 16 (Reuters) - Clearing houses -- the plumbers of high finance -- could become the next casualties of the crisis as regulators insist that banks run their riskiest and private trades through them.
At the moment banks conduct over-the-counter trades between themselves: one to one dealings often involving multimillion-euro bets on differences in interest or other rates, the scale and complexity of which can be difficult to track.

States look to hike tax on millionaires
By Tami Luhby @CNNMoney
NEW YORK (CNNMoney) -- As the "tax the rich" debate rages in Washington D.C., some states are turning to their wealthiest residents to bring in much-needed revenue.
The governors of the two largest Democratic states want rich folks to help close budget gaps. And Democratic lawmakers elsewhere are preparing to do battle with Republican leaders to blunt budget cuts by instituting amillionaire tax.

Drop in Public Workers Digs a Deeper Jobs Hole
By Douglas A. McIntyre - 247wallst.com
The fear that a drop in public sector jobs could undermine overall national employment has become a reality. The economy may have added an average of over 100,000 jobs each of the past six months. However, the unemployment rate among federal, state and local workers has risen only modestly. That has started to change, which could color the jobs picture throughout 2012.

Federal Government Jobs Disappearing at a Rapid Pace
Decreases in state and local
government job creation moderated in December
by Dennis Jacobe, Chief Economist - Gallup.com
PRINCETON, NJ -- Job creation by the U.S. federal government fell further into negative territory in December 2011 with Gallup's Job Creation Index at -20, worsening from -15 in November and from -12 in October. While 23% of federal employees in December said their area was hiring, 43% said employees were being let go -- by far the most negative conditions Gallup has found since it began tracking federal government job creation in August 2008.

It's Official:
Wealth Gap Has Turned America
Into a Seething Pit of Class Resentment
By Bruce Watson - DailyFinance.com
Do you think that the biggest conflict in America is between the rich and the poor? If so, join the club: According to a recent poll published by thePew Research Center, nearly two-thirds of Americans believe that the wealth gap is the greatest cause of tension in America.

If You Are A Blue Collar Worker In America
You Are An Endangered Species
TheEconomicCollapseBlog.com
Have you ever heard of the dodo bird? Once upon a time, dodo birds lived on the island of Mauritius in the Indian Ocean. But if you go there today you won't find any because they are extinct. Well, if you are a blue collar worker in America today it looks like you are headed for a similar fate. Blue collar workers are truly becoming an "endangered species" in the United States. In the old days, the balance of power between business owners and labor was more even because they both needed each other. But today that has all changed. Thanks to robotics, automation and computers there is simply not as much of a need for physical laborers anymore and nothing is going to reverse that trend. Big employers will continue to look for ways to replace men with machines, and there is nothing wrong with that. But there is another major trend that is also destroying blue collar jobs in America that we should do something about. Right now, it is perfectly legal for big corporations to shut down manufacturing facilities in the United States and send the jobs over to nations on the other side of the globe where it is legal to pay slave labor wages and where there are barely any regulations. As you will see later on this article, this has been the biggest reason for the shocking blue collar job losses in America over the past decade. The big corporations don't care that you need to pay the mortgage and put food on the table for your families. All they care about it the bottom line, and if dramatic changes are not made soon, the number of blue collar jobs leaving the United States will continue to increase.

In Praise of Homeschools
Mises Daily: by Aaron Smith
The most admirable group of entrepreneurs is perhaps the least appreciated. Homeschool parents, or parentrepreneurs, are not waiting for politicians and technocrats to fix broken systems of education. Rather, they are eschewing the status quo and finding innovative ways to advance the intellectual, emotional, and spiritual growth of their children. Unlike their counterparts in the public sector, parentrepreneurs have achieved astounding results with humble budgets.

Cartier Turns to Discreet Watches
to Assuage Luxury-Goods Guilt
By Dermot Doherty - Bloomberg.com
Cartier (CFR), the jeweler whose customers have included the tsar ofRussia and actress Elizabeth Taylor, says it’s pulling ahead of luxury rivals with watches that match the tenor of the times for less ostentatious displays of wealth.
Cartier is gaining “a lot” of market share, in part because the economic slowdown is steering consumers toward more discreet timepieces such as the brand’s best-selling Ballon Bleu collection, Chief Executive Officer Bernard Fornas said in an interview in Geneva. He declined to estimate how much share the Paris-based unit of Cie. Financiere Richemont SA may capture.

Why it’s China’s turn to worry about manufacturing
By Vivek Wadhwa - WashingtonPost.com
America has been extremely worried about the loss of manufacturing to China. Seduced by subsidies, cheap labor, lax regulations, and a rigged currency, American industry has made a beeline to China.
But the tide may soon turn.
New technologies will likely cause the same hollowing out of China’s manufacturing industry over the next two decades that the U.S experienced over the past twenty years. That’s right. America is destined to once again gain its supremacy in manufacturing, and it will soon be China’s turn to worry.

Big sites going 'dark' on Wednesday to protest SOPA
Wikipedia, Reddit plan blackout in SOPA protest
By Julianne Pepitone @CNNMoneyTech
NEW YORK (CNNMoney) -- A handful of large websites will go dark on Wednesday to protest an anti-piracy bill that critics say will wreck the Internet as we know it.
Wikipedia, user-submitted news site Reddit, the blog Boing Boing and the Cheezburger network of comedy sites all plan to participate in the blackout. The protest is their response to the Stop Online Piracy Act (SOPA) bill, a piece of proposed legislation that is working its way through Congress.

Controversial online piracy bill
shelved until 'consensus' is found
By Brendan Sasso - TheHill.com
House Oversight Chairman Darrell Issa (R-Calif.) said early Saturday morning that Majority Leader Eric Cantor (R-Va.) promised him the House will not vote on the controversial Stop Online Piracy Act (SOPA) unless there is consensus on the bill.
"While I remain concerned about Senate action on the Protect IP Act, I am confident that flawed legislation will not be taken up by this House," Issa said in a statement. "Majority Leader Cantor has assured me that we will continue to work to address outstanding concerns and work to build consensus prior to any anti-piracy legislation coming before the House for a vote."

NWO is Watching Every Move You Make!
Infowars Nightly News

Obama Thumbs Nose at Founders With One-man Rule
By Michael Barone - PatriotPost.us
Of course President Obama is not concentrating on campaigning, White House press spokesmen assured us -- as the president headed off to Chicago for three fundraisers and a drop-in at his campaign headquarters, two days after a high-roller fundraising choked off traffic five blocks from the White House, with the assistance of a score of D.C. police cars.
No one, or at least no one who is paying attention, is fooled. It's standard presidential procedure to say you're not absorbed in campaigning even as you go out to raise money every other day. Bill Clinton, in my view, spent an undue amount of time fundraising, George W. Bush spent more, and Barack Obama makes them both look like pikers.

PRESIDENT OBAMA’S ILLEGAL "RECESS" APPOINTMENTS
BY JOHN HINDERAKER - PowerlineBlog.com
President Obama’s unprecedented “recess” appointments, made when the Senate was not in recess, struck me as rather obviously illegal. It turns out that Obama got an opinion from his Justice Department justifying his move. Our friend Michael McConnell is as qualified as anyone to assess the adequacy of the DOJ opinion; he does so here:
Today, January 12, 2012, the Administration released an Office of Legal Counsel opinion, dated January 6, opining that the recess appointments were constitutional. The Opinion concludes that the pro forma sessions of the Senate conducted every three days during the December and January holiday are not sufficiently substantive to interrupt a Senate recess, meaning that the Senate was in recess from December 17 well into January. …

America’s Last Chance
by PAUL CRAIG ROBERTS - CounterPunch.org
America has one last chance, and it is a very slim one. Americans can elect Ron Paul President, or they can descend into tyranny.
Why is Ron Paul America’s last chance?
Because he is the only candidate who is not owned lock, stock, and barrel by the military-security complex, Wall Street, and the Israel Lobby.
All of the others, including President Obama, are owned by exactly the same interest groups. There are no differences between them. Every candidate except Ron Paul stands for war and a police state, and all have demonstrated their complete and total subservience to Israel. The fact that there is no difference between them is made perfectly clear by the absence of substantive issues in the campaigns of the Republican candidates.

Fraud And Folly:
The Untold Story Of General Electric’s
Shady Subprime Debacle
Nobody went to jail. A sadly familiar refrain.
Guest post by Michael Hudson for iWatch News - DailyBail.com
For General Electric Co., hawking subprime mortgages was a long way from making light bulbs and jet engines.
That didn't stop the industrial giant from jumping into the subprime business in 2004, lending blue-chip respectability to the market for risky home loans by paying roughly half a billion dollars to buy California-based WMC Mortgage Corp.
What GE got in the bargain, former WMC employees say, was a place where erstwhile shoe salesmen, ex-strippers and even a former porn actress could sign on as sales reps and make big money pushing home loans. WMC's top salespeople earned a million dollars a year or more and lived fast, swigging $1,000 bottles of Cristal and wheeling around in $100,000 Ferraris and Bentleys.

L.L. Bean marks century of selling begun with boot
By David Sharp - AP - FREEPORT, Maine — Back in the days before Gap, J. Crew or American Outfitters, there were guys like L.L. Bean.
In Maine a century ago, Leon Leonwood Bean found success without consumer research, focus groups or fashionistas to tell him what to sell. He sold only products that he personally used and tested. He backed them with a money-back satisfaction guarantee. And his larger-than-life personality was projected in his famous catalogs.

Drop off the e-mail treadmill?
IBM Gives Birth to Amazing E-mail-less Man
By Robert McMillan - Wired.com
When Luis Suarez decided to live in a world without e-mail, some of his colleagues thought he was making a mistake. After all, he works for IBM, one of the world’s top vendors of e-mail software.
But Suarez was ready to cut the cord. Like any other 21st century white-collar worker, he was bombarded daily with around 40 e-mail messages. More than he wanted to answer.

Details of new Apple iPad 3 revealed
Dayton Business Journal
Apple Inc. 's new iPad is expected to have a faster central processor and higher resolution screen. The next generation iPad that will be introduced in March, according to reports.
Bloomberg cited three unnamed sources it said are "familiar with the product" in a story on Friday afternoon that said the iPad 3 will use a quad-core chip instead of the dual-core chip on the iPad 2.

Apple Mini-Stores Coming to Target
by Samantha Murphy - Mashable.com
Target has confirmed that it will be introducing 25 Apple mini-shops within its stores this year.
Last week, rumors that the discount retailer might be partnering with Apple started to circulate, but the companyrevealed to the New York Times on Thursday that it will officially test the store-within-a-store concept at various locations. The news came after Target announced it will be partnering with several specialty stores to attract more shoppers to its locations.

Apple Could Create Its Own TV Reality
By ROLFE WINKLER - WSJ.com
Would it be called iTV? Perhaps the iPanel?
The TV prototype in Apple's skunk works has many wondering if the tech giant will upend yet another major market. Excitement over such a device increased when Walter Isaacson's recent biography quoted Apple's late Chief Executive Steve Jobs saying he wanted "to create an integrated television set" and that he had "finally cracked" the issue of simplifying the user interface.
Apple hasn't spoken of such a device, and while it is known to exist, its precise form is a mystery. For curious investors, it is useful to study Apple's past forays into other new markets. It overcame doubts to remake music with the iPod, telephony with the iPhone and computing with the iPad.

Airlines seek first fare hike of 2012
Dayton Business Journal by Chris Bagley, Staff Writer
Airlines began a round of fare hikes this week, their first of 2012, according to Farecompare.com.
Delta Air Lines Inc., based in Atlanta, began the round Wednesday afternoon with $20 increases on long routes, Farecompare reported.
It was followed Wednesday evening bySouthwest Airlines and AirTran Airways and Frontier Airlines. On Thursday others joined in, including American Airlines, United Airlines and recent merger partner Continental and US Airways.

Veterans’ new battle front: Job market
Skill transition is new territory
By Andrea Billups-The Washington Times
When Tom Tarantino left the Army as a captain in 2007, he was uncertain how his jobs skills as a mortar and cavalry platoon leader in Iraq and his Bronze Star might be marketable when he entered the workforce back home.
"A good part of it was me not understanding how to sell myself," he recalls of his initial job hunt. "It’s not like I did nothing for the 10 years I was in the military, but I had nothing to go by, to understand what a civilian market needs and how to transition from that."

Air Force Invades the Rocky Mountains
by CAROL MILLER - CounterPunch.org
The Rocky Mountains burst out of the short grass prairies of northern New Mexico and southern Colorado with a special beauty that is part of the DNA of its residents and former residents. People from all over the world seek out these mountains. This is the “purple mountains’ majesty" of "America the Beautiful."
The people who live in this area are deeply rooted and very protective of this wonderful place. The area teems with wildlife, breathtaking mountain peaks, wilderness areas, forests and natural wonders like the Black Canyon of the Gunnison, Shiprock and the Rio Grande Gorge.

Israelis increase trust in Obama
Small majority now see ally
By Ben Birnbaum-The Washington Times
JERUSALEM — Rabbi Dov Hayun invoked the Jewish prohibition on mixing milk and meat products to describe one common view here of President Obama.
"Obama is 'parve,' " Mr. Hayun said, using the term for foods that belong to neither category. "With [Presidents] Clinton and Bush, you could say, 'This is milk, this is meat.' They had different approaches, but nobody ever doubted that they loved Israel.

Syria: beyond the wall of fear,
a state in slow-motion collapse
Despite the superficial calm in Damascus, everyone knows change is coming. The only question is, how much will it cost?
By Ian Black in Damascus - Guardian.co.uk
Sipping tea in a smoky Damascus cafe, Adnan and his wife, Rima, look ordinary enough: an unobtrusive, thirtysomething couple winding down at the end of the working day in one of the tensest cities in the world.
But like much else in the Syrian capital, they are not what they first seem: normally, he is a software engineer and she a lawyer; now, they are underground activists helping organise the uprising against President Bashar al-Assad.

Group says Keystone pipeline benefits are embellished
Wants focus shifted to renewable sources
By Tim Devaney-The Washington Times
A coalition of businesses is the first such group to denounce the Canada-to-Texas Keystone XL oil pipeline and is urging President Obama to reject the project and turn the nation’s focus to alternative and renewable energy.
The American Sustainable Business Councildisputes Keystone’s job numbers and energy security claims that most other business organizations tout when discussing the project.

Gas prices may get close to $5 in some spots
By James O'Toole @CNNMoneyMarkets
NEW YORK (CNNMoney) -- The new year has greeted Americans with the highest January gas prices ever, and some analysts say prices could get close to $5 a gallon in some areas during the warm-weather driving season.
The average price for a gallon of regular unleaded gasoline in the United States on Monday was $3.39, according to motorist group AAA. That's nearly 30 cents higher than a year ago.
The national average reached a peak of $4.114 in July 2008.

New Fracking Technology
to Bring Huge Supplies of Oil and Gas to the Market
Written by Brian Westenhaus - OilPrice.com
Petroleum reservoir fracturing is set for a major improvement with new technologies going to work miles down from the surface and then out horizontally. Called fracking, the process uses pressure to break into oil and natural gas rocks and prop channels for the petroleum products to flow back out.
Thus huge new supplies of oil and gas are coming to market.
It’s no surprise that the technology is already international, starting in the U.S. it’s already going to work in Canada, Argentina, Russia, Mexico, Poland, the Middle East and more.

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Archived Page Link
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Monday 01.16.2012

Gold lower ahead of 3-day
Martin Luther King Jr. holiday weekend in U.S
NEW YORK (Commodity Online): Many factors have tugged Gold lower ahead of the three-day Martin Luther King Jr. holiday weekend in the U.S., said RBC Capital Markets Global Futures.
Martin Luther King, Jr. Day is a United States federal holiday marking the birthday of Rev. Dr. Martin Luther King, Jr. It is observed on the third Monday of January each year, which is around the time of King's birthday, January 15.

Gold: Current bull market
is a carbon copy of the 1970's bull market
By Hubert Moolman
Below, is a Gold alert sent to my premium subscribers, on 5 January 2012. The patterns indicated, suggest that we will have a massive rally in gold over the coming months.
Below, is a graphic that compares the gold chart from 1998 to present, to that of 1975 to 1979. [see charts]
The current pattern is much larger than the 70s pattern and also more complex. I have marked both patterns (1 to 7) to illustrate how the patterns could be similar. If my comparison is justified then we will have a massive rally over the next months.

Six reasons why still to buy gold bullion or gold
By Mike Neon - CommodityOnline.com
When you see across the world, you will notice bad times giving you reasons to put your money in Gold bullion . Having gold at any point of time is a secure choice to try since it works when everything fails.
Six reasons why to buy gold bullion or gold:
--Fights with a troubled economy: We see the US and the world economy fluctuating where we see effects shaky about the dollar and euro and even other currencies of the world sinking to a great extent. At such juncture when currencies are losing value, buying gold bullion or gold somewhere in the past will help him survive the bad economy.

Gold 2012: Goldman maintains 12-month target of $1,940/oz
LONDON (Commodity Online): Goldman Sachs is maintaining its 12-month target of $1,940 an ounce for gold. The metal fell in December in a scramble for U.S. dollar liquidity by European banks, which led them to lease Gold for U.S. dollars, in turn driving gold lease rates lower.
While gold has retraced more than half of December’s decline, Goldman says the downward pressure from European bank funding issues has left gold prices at a steep discount to levels suggested by 10-year yields of Treasury Inflation-Protected Securities.

Chris Waltzek interviews GERALD CELENTE
on his early forecast for 2012

Silver: A unique buy signal from the CEF
By Adam Brochert - CommodityOnline.com
I stumbled onto this little gem about a year ago and I think it is about to work its magic again. I am speaking of the ratio of the Central Fund of Canada (CEF) to the price of Gold.
This CEF:Gold ratio barely triggered a buy signal for Silver on December 27, 2011. Of course, a "barely triggered" signal may be all we are able to achieve if silver is getting ready to rocket higher after a brutal but fairly typical (for silver) correction from the the spring, 2011 highs. Here's a chart of this ratio through today's close to show the buy signal for silver (the top plot is the price of silver, while the lower plot is the CEF:$GOLD ratio):

Silver: If you buy anything in 2012, buy Silver
NEW YORK (Commodity Online): Silver is the commodity to buy in 2012, believes Smith McKenna LLC adding that silver will dominate the markets in 2012.
Stephen M. Smith, managing member Smith McKenna, has 20 plus years of experience in commodity-market analysis and advises that silver will emerge as king.
"It's the only place to be," says Smith. "Silver will dominate the commodity market in 2012."

The evolution of American debt
Over the last century, over-borrowing has gone from shameful to commonly accepted. An expert explains what changed
BY HANNAH TEPPER - Salon.com
In the US today, debt is ubiquitous. Whether it’s paying back thousands of dollars in student loans, using your Visa card for a pack of gum when you’re out of cash, or taking out a mortgage on a first home, it’s been woven into our financial system so tightly, that even when we suffer the sometimes cruel and unusual detriments of borrowing, we have little to no realistic impetus to stop. But it wasn’t always this way. In fact before the 20th century, debt was a taboo, feared, shameful, and kept in the shadows. So what events and institutions brought debt from its meager beginnings to its central role in American life?

Money Printing: The Ugly Truth Behind the "Good News"
By Bill Bonner - DailyReckoning.com
01/13/12 Johannesburg, South Africa – Yesterday’s trading revealed nothing of importance. Small moves in stocks and gold. And oil dipped below $100.
But the news has been generally "good" ever since the European Central Bank made it clear that it will print money rather than see major banks or minor nations get what is coming to them. Like its US counterpart, the ECB will not permit a major bank or sovereign debtor to go bust.
"ECB sees signs of let-up in debt crisis," is today’s headline in The Financial Times.

Reading between the lines:
Who's paying for the payroll tax cut extension?
BY G. STEVEN BRAY - Austin.CultureMap.com
...if you're buying or refinancing a home, there's a good chance you are.
On Dec. 23rd, President Obama signed into law the Temporary Payroll Tax Cut Continuation Act of 2011 with great fanfare. The law extends the payroll tax holiday that we enjoyed in 2011 for two months (or through Feb. 29).
In order to pay for the extension, the law directs the Federal Housing Finance Agency (FHFA) to increase guarantee fees charged by Fannie Mae and Freddie Mac by no less than 10 basis points (one-tenth of a percent), effective immediately. Lenders pay the guarantee fee when they sell a mortgage to Fannie or Freddie primarily to cover the risk that the loan might default. (It's kind of like insurance.)

Treasury Yields Drop
to Yearly Low as European Debt Crisis Intensifies
By Susanne Walker and Cordell Eddings - Bloomberg.com
Treasuries rose, pushing yields to the lowest levels this year, asFrance was stripped of its top credit rating and talks to restructure Greek’s debt stalled, boosting demand for the safety of U.S. government debt.
The yield on the benchmark 10-year note touched the lowest level since Dec. 20 yesterday and the Treasury drew record demand at three- and 10-year note auctions this week. A model created by economists at the Federal Reserve that includes expectations forinterest rates, growth and inflation indicates 10-year notes are the most overvalued on record.

Peter Schiff: U.S. is In Worse Shape Than Europe

U.S. Trade Deficit Widens
More Than Economists Forecast as Exports Decline
By Alex Kowalski - Bloomberg.com
The U.S. trade deficit widened more than forecast in November as American exports declined and companies stepped up imports of crude oil and automobiles.
The gap expanded 10.4 percent to $47.8 billion, the widest since June, from a $43.3 billion shortfall in October, Commerce Department figures showed today in Washington. The deficit was larger than any of the estimates in a Bloomberg News survey of 75 economists.

The Year Of The Central Bank
by Doug Noland - PrudentBear.com
The start of a new market year is, undoubtedly, analytically intriguing. One wouldn’t think that the calendar should have such impact. Yet January arrives with a clean performance slate and an opportunity for new, perhaps not as unsullied, market dynamics. What’s the new game? The previous year’s underperformers can rather abruptly be transformed into darlings of the New Year (especially if those stocks have large short positions). The general market also tends to benefit from strong seasonal inflows. And if stocks can charge out of the blocks briskly, a plethora of bullish news and analysis is sure to follow.

Euro Falls After S&P Strips France of AAA Rating
By Candice Zachariahs and Robert Burgess - Bloomberg.com
The euro weakened for a second day, reaching an 11-year low versus the yen, after Standard & Poor’s stripped France of its top credit ratingand cut eight other euro-zone nations.
The shared currency extended a six-week-long slide against the greenback before France sells as much as 8.7 billion euros ($11 billion) in bills today, amid concern Europe’s financial turmoil will intensify. Greece may resume talks with creditor banks this week after failing last week to agree on terms of a debt-swap deal. The Australian and New Zealand dollars fell as a drop by U.S. stocks damped demand for higher-yielding assets.

Euro shaky after mass ratings downgrade, outlook poor
By Ian Chua
(Reuters) - The euro eased in early Asian trade on Monday and looked set to stay under pressure after Standard & Poor's mass downgrade of euro zone countries late last week, including France, dealt the region another setback.
News of the downgrade came as negotiations between Greece and private creditors on a debt swap deal broke down, raising the risk of a messy Greek default. Markets are also worried the euro zone's bailout fund, EFSF, might lose its AAA rating with S&P as well.

Marc Faber - 2012 European Crisis!

Nine Euro Nations’ Ratings Cut, Seven Affirmed
By Simon Kennedy, Patrick Donahue
and Mark Deen - Bloomberg.com
France and Austria lost their top credit ratings in a string of downgrades that left Germany with the euro area’s only stable AAA grade as Standard & Poor’s warned that crisis-fighting efforts are still falling short.
France and Austria were cut one level to AA+ from AAA and face the risk of further reductions, the rating company said in Frankfurt late yesterday. While Finland, the Netherlands and Luxembourg kept their AAA ratings, they were put on negative watch. Spain and Italy were also among the nine nations downgraded.

Merkel Says S&P Downgrades
Show Euro-Region Leaders Must Redouble Efforts
By Brian Parkin and Patrick Donahue - Bloomberg.com
Chancellor Angela Merkel said euro- area downgrades by Standard & Poor’s reinforce Germany’s stance that European leaders must redouble their efforts to resolve the debt crisis as governments prepare to sell more debt this week.
"The decision confirms my conviction that we have a long way ahead of us before investor confidence returns," Merkel told reporters yesterday in Kiel. Resolving the crisis is a "longer process" that will take more than a few months, Merkel said in comments broadcast today by Deutschlandfunk radio.

Scrubbed MF Global Filing Resurfaces at the SEC,
But More Questions About Suspicious Filing Practices Surface
By Bob English at EconomicPolicyJournal.com
On December 24, 2011, we reported that the most recent financial audit filing of the MF Global Inc. broker unit had disappeared ten days earlier from the Securities and Exchange Commission's public EDGAR database. It was this key filing that provided material details about the European debt trades that helped sink the firm--more details than the 10-K and 10-Q's of its public holding company disclosed. For instance, we revealed on November 9, days after the bankruptcy filing, that the repo-to-maturity trades were conducted with an affiliate, which retained 80% of the profits from the up-front booked sale, and which left the US broker unit holding 100% of the risk.

Keiser Report: Wall Street Gangsta! (E236)

What CEOs and Hedge Funds
Don't Want the 99% to Understand
By Roger Martin - HuffingtonPost.com
Zuccotti Park may be emptied and the Wall Street no longer occupied, but the anger of the 99% hasn't abated one iota as they watched CEOs cash in on the recovery and hedge funds make money hand over fist whether the market is going up or down. This shouldn't be a surprise. The fact is, because of the structure of their compensation, CEOs are rewarded for share price volatility not share price performance. And hedge funds make big money on the volatility that CEOs are incented to produce. So while the volatility of the past five years has devastated the lives, savings and pensions of vast numbers of the 99%, it has served CEOs and hedge fund managers very well indeed.

Fed Officials Debate Impact
of Revealing Their Interest-Rate Forecasts
By Vivien Lou Chen and Caroline Salas Gage - Bloomberg.com
Federal Reserve Bank of St. Louis President James Bullard pointed out pitfalls in a Fed plan to forecast interest rates, highlighting a debate among officials on whether the move will provide clarity about policy.
Bullard told reporters on a conference call yesterday that "there is some risk" the projections for the benchmark interest rate will be mistaken as a commitment to certain rate levels in the future. He later said that while the move should "be a little bit helpful," it’s "no panacea."

Fed officials say not time to buy bonds now
By Mark Felsenthal
(Reuters) - Two top Federal Reserve officials, including a policy centrist, said on Friday the central bank should hold off buying more bonds to boost growth given a strengthening in the economy.
"The data has been stronger in recent weeks and months, and so I think there's probably a good case to stand pat for now," St. Louis Federal Reserve Bank President James Bullard told reporters after a speech here.

NY Fed seeking bidders for mortgage bonds
By Carrick Mollenkamp
(Reuters) - The Federal Reserve Bank of New York will test a new strategy for getting the best price for beaten-down mortgage bonds after being approached by a potential buyer for the bonds.
Prompted by interest from the buyer, identified as Goldman Sachs Group Inc (GS.N), the New York Fed over the next week is expected to attempt to sell about $7 billion worth of securities that were acquired as part of the 2008 bailout of American International Group Inc (AIG.N).

More aggressive Fed could benefit economy: Evans
By Jonathan Spicer
(Reuters) - The economy could improve one to two years earlier than it otherwise would if the Federal Reserve behaves "very aggressively," including possibly making additional asset purchases, a top Fed official said on Friday.
The central bank should make the purchases if the labor market does not make sufficient progress quickly enough, Chicago Federal Reserve President Charles Evans told reporters, adding that mortgage-related securities would be a "perfectly fine" option.

Fed’s Lacker Says
There's No 'Compelling Case' for More Monetary Stimulus
By Craig Torres - Bloomberg.com
Federal Reserve Bank of Richmond President Jeffrey Lacker said he still doesn’t see the need for additional monetary stimulus and the central bank should avoid targeting specific markets such as mortgage debt with its policies.
"I am still where I was a month or two ago when I said I didn’t see a compelling case for further stimulus," Lacker told reporters after a speech to the Risk Management Association in Richmond, Virginia. "The record of the last year and a half is that stimulus raised inflation and didn’t do much for growth on a sustained basis. And I think if we did it again, that is what would happen."

If we don't listen to Ron Paul...
the FED is going to destroy our Monetary System

Obama Pitches One Federal Department for Business
Are companies or entrepreneurs well-served with multiple federal agencies that deal with business issues? President Obama doesn't think so, and he's proposed consolidating the SBA and five other agencies in a pitch to streamline things and to save taxpayers money.
by Kent Hoover - Portfolio.com
President Barack Obama asked Congress today for the authority to consolidate six departments and agencies that serve business—including the Small Business Administration—into one agency.
This would make it easier for businesses to get the assistance they need and save taxpayers’ money, Obama said.

Wrong-Way Friedman
By Doug Casey - DailyReckoning.com
Interview with Doug Casey,
by Louis James, Editor, International Speculator
L: Hola, Doug — what’s on your mind?
Doug: Well, you know I try not to read much in the popular press. It’s mentally unsanitary. But occasionally, a few things catch my notice. For example, I’ve got an article I tore out of the September 3 Wall Street Journal — it’s been in a stack of papers for a couple of months, and I just uncovered it. I couldn’t decide, when I first tore it out, whether it was simply beneath contempt or worth commenting on. It’s an absolutely shocking indictment of the depth to which the moral and intellectual character of what was once America has descended. The title is How to Turn in Your Neighbor to the IRS. The author’s theme is that the IRS is offering big rewards to people who turn in tax cheats — but there are catches. As though the depravity of denouncing your neighbors to a ruthless, brutal, and predatory government bureaucracy were a good thing, as long as one is careful in going about it.

City Bankruptcies Will Increase, Dimon Warns
The Huffington Post - by William Alden
As cities across the nation face increasing budget strains, the vocal group of experts warning about municipal defaults has gained a powerful member: Jamie Dimon.
The JPMorgan CEO said he expects to see more U.S. municipalities declare bankruptcy, Bloomberg News reports. His concerns echo those of Meredith Whitney, the analyst who has said the next major financial crisis will come from a wave of local government defaults, and those of famed investorWarren Buffett, who has called the municipal debt situation a "terrible problem."

Troubled RI city in receivership loses democracy
By ERIKA NIEDOWSKI - AP - News.Yahoo.com
CENTRAL FALLS, R.I. (AP) — When the state stepped in to take over financially struggling Central Falls in 2010, Rhode Island's smallest city lost something fundamental: its democratic government.
Mayor Charles Moreau would be forced to give back his key to City Hall, and the City Council was relegated to advisory status — unsure for months whether it was even allowed to convene.

5% of Americans Made Up 50% of U.S. Health Care Spending
And the top 1%? They made up one fifth of medical expenditures.
By Jordan Weissmann - TheAtlantic.com
When it comes to America's spiraling health care costs, the country's problems begin with the 5%. In 2008 and 2009, 5% of Americans were responsible for nearly half of the country's medical spending.
Of course, health care has its own 1% crisis. In 2009, the top 1% of patients accounted for 21.8% of expenditures.

Eleven states, D.C. back Obama on health law
By Paige Winfield Cunningham-The Washington Times
Eleven states and the District of Columbia are siding with the Obama administration in the legal battle over the constitutionality of the new health care law, as more than half the states prepare to challenge the law before the Supreme Court.
Attorneys general in California, Connecticut, Delaware, Hawaii, Illinois, Iowa, Maryland, New Mexico, New York, Oregon, Vermont, the District of Columbia and the Virgin Islands filed an amicus brief with the Supreme Court on Friday supporting Congress‘ authority to pass the sweeping legislation, arguing that health care is a national concern because the industry constitutes nearly one-fifth of the U.S. economy.

Attacks on Social Security,
Medicare borrow a strategy from Lenin
For three decades, conservatives' proposals for dramatic changes to the programs have reflected a divide-and-conquer strategy inspired by the Leninist movement.
By Michael Hiltzik - LATimes.com
About the last thing you'd ever expect is for conservatives to draw procedural lessons from the founder of the Soviet state. So it's fascinating to ponder the persistence of an attack on Social Security that was explicitly billed as a "Leninist" strategy three decades ago by analysts at the Heritage Foundation and is still in use today.
This is the notion, which is part of pretty much every proposal today to "fix" Social Security andMedicare, that benefits for the retired and near-retired should be guaranteed, while those for everyone else must be cut.

Evans Says Jobless Rate May Rise as Progress 'Transitory'
By Joshua Zumbrun - Bloomberg.com
Federal Reserve Bank of Chicago President Charles Evans said the drop in the unemployment rate to 8.5 percent may be partially reversed in coming months.
"I’m a little concerned that the most recent improvement is going to be transitory and it might move up above 8.5 percent," Evans said in response to audience questions after a speech today in Carmel,Indiana.
Evans said he forecasts that "at the end of the year, we’re not going to be very different from 8.5 percent unemployment."

Peter Schiff -
Infowars Nightly News for Friday, January 13, 2012

How the Wall Street Journal Misleads About Federal Jobs
By Jeffrey Sachs - HuffingtonPost.com
The editorial board of Rupert Murdoch's Wall Street Journal has a simple game. They want to cut taxes for the rich and government services for the rest, and end regulations of banks and the environment. They support taxpayer-financed bailouts of Wall Street when needed. They will twist any facts in the service of these goals.

Housing and Oil: Dark Inventory Rules
By Ilargi: TheAutomaticEarth.com
I'd like to try a little intellectual exercise. There were two pieces in my mailbox this week that concerned posts at Naked Capitalism. Though their topics have at first glance little to do with one another, there is a term that is pivotal to both. Inventory.
When it comes to real estate, it's popularly called "shadow inventory". With regards to commodities, the term "dark inventory" has been coined. While there are plenty of differences in the way the terms are applied, I'm for now intrigued more by - potential - similarities between them.

Dropbox inventor
determined to build the next Apple or Google
Drew Houston's wildly popular service allows people to access the latest version of all their digital stuff on any device no matter where they are. Every day 325 million files are saved on Dropbox.
By Jessica Guynn, Los Angeles Times
Reporting from San Francisco— Four years ago, Drew Houston was just another super-smart hacker with ambitions of starting his own company.
He'd strap on headphones to block out everything but the endorphin rush as he cranked code late into the night on a new service that instantly syncs all of your files on all of your devices.

Nigerian fuel strike continues, could impact U.S. oil supply
By Bashir Adigun and Jon Gambrell - AP - WashingtonTimes.com
ABUJA, Nigeria — Nigeria's government and labor unions failed to end a paralyzing nationwide strike over high gasoline costs, potentially sparking an oil production shutdown in a nation vital to U.S. oil supplies.

Beware a slow cascade of additional foreclosures in 2012
By Alan J. Heavens - Philly.com
If the numbers were the only barometer, it would appear that the U.S. foreclosure crisis had eased considerably in 2011. But taken alone, those statistics don't tell the whole story of the pressures on homeowners and how they are affecting the nation's housing market.
Over the last 12 months, the foreclosure rate and the number of filings nationwide reached their lowest point since the current spiral intensified in 2007, RealtyTrac Inc. reported last week.

Cops shoot strays
The secret lives of feral dogs
A Pennsylvania city instructs police to shoot strays, opening a sad window on animal care in the age of austerity
BY WILL DOIG - Salon.com
Want to get people riled up? Institute a new policy about shooting puppies.
The city of Harrisburg, Pa., learned this last week when an internal police department memo went public, instructing officers of the cash-strapped city to stop bringing its growing number of stray dogs to the shelter. Instead, it said, they should release them in another area, adopt them themselves — or just put a bullet in them. Now that’s the new austerity.

Has Capitalism Failed Us?
By Bill Bonner - DailyReckoning.com
01/13/12 Johannesburg, South Africa – "Americans think we are stupid," said a European diplomat at a dinner party in Washington. "But we’re not stupid. We’re just working out the problems involved in forming what you might call 'a more perfect union.'"
"Well, you can unify all you want…it won’t make your debts go away," we replied. We always try to be a cheery presence at dinner parties…especially in Washington.
"No…but it will make it easier for us to manage them, just as you do here. And by the way, the US has about the same amount of debt as Europe. The latest figures show the average of all OECD countries is about 100% of government debt to GDP. The US is right in the center…right at the average."

Bob Chapman on the best countries to run to

Auction 2012: Top 10 Reasons to Get Money Out
By Dylan Ratigan - HuffingtopnPost.com
Tomorrow night, we'll see returns from the New Hampshire primary, the second contest in the Republican Presidential nomination. Most people think of this as an election, where voters go to the polls and select their preferred candidate. But I believe, and an increasing number of viewers believe, that our political system has become an auction in which the highest bidder wins.
If something about this election feels wrong to you, you're not alone. Here are ten facts about the political process that show why we need to end the auction by getting money out of politics.

U.S., Israel postpone military exercise amid tension with Iran
By Batsheva Sobelman - LATimes.com
REPORTING FROM JERUSALEM -- The United States and Israel agreed to postpone a large joint military exercise from this spring to late in the year to avoid aggravating an already tense regional situation driven by conflicts with Iran, Israeli media reported Sunday.

Iran warns Gulf Arabs on oil
By Tarek El-Tablawy - AP - WashingtonTimes.com
CAIRO (AP) — Iran warned Gulf Arab oil producers against boosting production to offset any potential drop in Tehran’s crude exports in the event of an embargo affecting its oil sales, the latest salvo in the dispute between the West and the Islamic Republic over its nuclear program.

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Friday 01.13.2012

U.S. Sends Top Iranian Leader a Warning on Strait Threat
By ELISABETH BUMILLER, ERIC SCHMITT
and THOM SHANKER - NYTimes.com
WASHINGTON — The Obama administration is relying on a secret channel of communication to warn Iran’s supreme leader, Ayatollah Ali Khamenei, that closing the Strait of Hormuz is a "red line" that would provoke an American response, according to United States government officials.
The officials declined to describe the unusual contact between the two governments, and whether there had been an Iranian reply. Senior Obama administration officials have said publicly that Iran would cross a "red line" if it made good on recent threats to close the strait, a strategically crucial waterway connecting the Persian Gulf to the Gulf of Oman, where 16 million barrels of oil — about a fifth of the world’s daily oil trade — flow through every day.

Dear U.S.A.: Your Accout Is Overdrawn
BY CHARLES HUGH SMITH - FinancialSense.com
Dear U.S.A. — your overdraft protection is about to be pulled.
Dear United States of America: We regret to inform you that your withdrawals exceeded your deposits last year by $1,600,000,000,000 ($1.6 trillion), including your "supplemental appropriations" spending.
Your account does have an overdraft protection, and so bonds were sold to cover your $1.6 trillion overdraft. While we value your business, we feel obligated to remind you that this is the third year that your overdraft protection exceeded 10% of your gross national product (GDP), and it seems your account is on course to register yet another $1.6 trillion overdraft in fiscal year 2012.

Dollar Crisis Coming–Just a Matter of Time
The US Dollar Paper Tiger
By Jim Willie of Goldenjackass.com
Guest Writer for USAWatchdog.com
Events in the last decade displayed a vigorous effort to defend the USDollar. The rogue nation of Iraq sold crude oil in Euros for three years, until they were liberated. Its tyrant was a scourge to be sure. Weapons of financial mass destruction seem to have replaced the traditional type, the new variety being derivatives, mortgage bonds, and even sovereign bonds from weak nations. Newer weapons from the United States feature extended hands from clearing house fronts that snatch and grab segregated private accounts, and backdoor raids of exchange traded fund precious metal. Let’s not overlook the more frontal assault weapons deployed like unseating Qaddafi and capturing his gold held in foreign accounts, along with all that cash. Liberation has its benefits. The confrontation with Iran would be comical if not so dangerous. The claims have been silly in my view for years, in the perception of Iran as a serious threat to the West. They have been subjected to cut communication lines on the Persian Gulf seabed. They have been subjected to Stuxnet viruses to obstruct their nuclear refinement process, via the Siemens rear door. They have been subjected to an influx of heroin from the north, where the USMilitary manages the Afghan situation and locale.

Fiat Money: Explained in less than 4 minutes

Gold Is Investors' Favorite Asset in 2012
By: Antonia Oprita, Deputy News Editor - CNBC.com
Gold is investors' favorite asset for 2012, and developed markets are preferred over emerging markets when it comes to putting money in stocks or bonds, according to a poll carried out by Japanese investment bank Nomura.
Of the 164 investors who took part in Nomura's poll, 19.5 percent said they would choose to buy gold and hold it until the end of the year. Other favored assets were stocksand investment-grade corporate bonds in developed markets, with about 13 percent of responses.

China Gold Hoarding
Turns More Traders Into Bulls: Commodities
By Nicholas Larkin - Bloomberg.com
Gold traders are the most bullish in two months after mainland China imported the most metal ever from Hong Kong and investors bought U.S. bullion coins at the fastest pace in more than a decade.
Eighteen of 23 surveyed by Bloomberg expect the metal to gain next week, the highest proportion since Nov. 11. Mainland China imported almost 102.8 metric tons in November, valued at about $5.5 billion, trade data on Jan. 11 showed. The U.S. Mint said it sold 82,500 ounces of American Eagle gold coins in the first 11 days of January. Full-month sales would reach 235,000 ounces at that pace, the most since 1999.

Gold-Dollar correlation near zero. Is this unusual?
By Sumit Roy - CommodityOnline.com
It has been a bullish start to 2012 for gold, as Gold Prices rally swiftly off the lows set late last year. From the perspective of technical analysis, it looks increasingly likely that gold put in a double bottom at $1532 in December, but a decisive break of $1642 will be required for confirmation.

2012 gold panic in China?
By Adrian Ash - CommodityOnline.com
China's latest Gold figures look unrelentingly bullish. Too bullish perhaps...
So "Growth has [now] replaced inflation as Beijing's top policy concern," says Qu Hongbin, Asian economics expert at HSBC in Hong Kong, forecasting three cuts to China's banking reserve requirements by July.
"There is developing in Beijing, I think, almost a panic about global economic prospects and the impact of the European crisis on China," agrees Michael Pettis, finance professor at Peking University. He goes one further and forecasts debate - if not the fact - of a currency devaluation in 2012.

Dominic Frisby - Why Gold is the Currency of the Free
May, 2011 - at the Cheviot Sound Money Conference

Gold & silver: Creating the right exit strategy
CommodityOnline.com
As we climb the wall of fear in this present Gold and Silverbull market, weak hands are constantly calling tops, even though the kettle has not really started to boil. GI Metals DMCC views that there will be no need to think about getting out of this particular asset class and into another more undervalued one, until two things occur.
Firstly, the general public needs to be getting into gold and silver en-masse, and secondly, the end-game of the current fiat/debt crisis needs to commence in truth: the end-game is the collapse of the world reserve currency. Although this has been occurring slowly over the last century, in order for there to be a mad rush into gold and silver driven by fear and greed, there must also be a pronounced loss of confidence in the American dollar. That is what will turn gold and silver from being the excellent hedge and cultivator of wealth it has been over the last decade to being virtually the only place to be; for a time.

What the 11 year Gold rally and its corrections teach us
NEW YORK (Commodity Online): Right now you need to understand that Gold is beginning the twelfth year of major bull market; perhaps the most unprecedented bull market in our lifetime. Here's a quick snapshot of what that bull market has looked like since the 1999 bottom and the 2001 retest of that bottom:
And from the point of view as an investor, this is about as beautiful as it gets. As I mentioned above gold is entering the twelfth year of its bull market and has posted gains in each and every year. Below I have listed gold's closing price on the last day of each year:

2000 -- $273.60
2001 -- $279.00
2002 -- $348.20
2003 -- $416.10
2004 -- $438.40
2005 -- $518.90
2006 -- $638.00
2007 -- $838.00
2008 -- $889.00
2009 -- $1096.50
2010 -- $1421.40
2011 -- $1566.80

Rothschild Silver/Gold Manipulation Fraud Explained
from April, 2010

ECB-Gold reserves decline by 2 mn euros in January
FRANKFURT (Commodity Online): Gold and gold receivables held by euro zone central banks fell by 2 million euros to 423.455 billion euros in the very first week ending January 6, as per a report by the European Central Bank.
Gold holdings fell because of the sale of gold coins by a Eurosystem central bank.
Net foreign exchange reserves in the Eurosystem of central banks declined 1.6 billion euros to 217.7 billion euros, the ECB added.

China gold buying surge? It must be PBOC
By Ross Norman
In the old days unexplained rallies in the Gold price would be attributed to "hedge fund buying" with an insouciant shrug of the shoulders. Meanwhile a bounce in the price off a support level might be supposed to be "indian buying" coupled with the words "bargain hunting" or the more evocative "bottom-picking". There was often some truth in those suppositions.
Today gold strength is normally ascribed to the Chinese and with good reason. Hong Kong imports rose by a massive 20% in November over the previous month - which is a trebling over the last 11 months. Hong Kong imports rose from 86 tonnes in October 2011 to over 102 tonnes in November 2011. China exceeded Indian demand for the first time in the last quarterly report issued by the WGC in its World Gold Demand Trends.

Inflation: An Expansion of Counterfeit Credit
BY PATER TENEBRARUM - FinancialSense.com
.... Inflation is not rising consumer prices. One can’t understand much about the monetary system from inside this box. I offer a different definition:
Inflation is an expansion of counterfeit credit
Most Austrian School economists realize that inflation is a monetary phenomenon. But simply plotting the money supply is not sufficient. In a gold standard, does gold mining create inflation? How about private lending? Bank lending? What about Real Bills of Exchange?

Peter Schiff: A Silver Breakout is Coming
video from August, 2011

Europe's north is bustling, its south closing down
By Ludwig Burger and Paul Day
(Reuters) - At German car parts maker ixetic GmbH, Dragan Knezevic is struggling to keep up: His job as foreman is to make sure there are no hold ups in assembly of the parts needed to keep Audis, VWs, Toyotas and the like on the road.
"We are going full speed over all three shifts. Early, late and night shift," he says at the bustling plant in Bad Homburg, outside Frankfurt.
They are so busy that temporary workers have had to be found.

Deadly Dow 36,000
& The Secret History Of A 70% Market Loss
BY DANIEL AMERMAN CFA - FinancialSense.com
Some investors fear that the Dow may go to 4,000 or 5,000. Surely that would be bad, but there is a worse possibility to consider, which is that the Dow could go to 36,000 instead. Now, Dow 36,000 may sound like a "problem" that most investors would love to have! So what's the danger?
To demonstrate why Dow 36,000 could be a nightmare scenario, we will begin with a review of how 70% of stock investor wealth was annihilated the last time the US endured the combination of sustained high unemployment and high rates of monetary inflation. Using a series of simple steps, we will pierce through the generally accepted but false narrative about that market, and show how even with an assumption of "perfect" market timing - that is, buying on the best single day over a near 12 period, and selling on the best single day over an almost 10 year period - that the historical end result was still crippling investor losses, caused by three distinct wealth-destroying forces.

MF Global May Not Be Able to Pay Clients Back: Trustee
By: Reuters - CNBC.com
Former customers of MF Global Holdings' collapsed brokerage were disappointed to hear on Thursday that the trustee hunting for funds missing from their accounts has no immediate plans to transfer more money to them.
More than 250 customers met in New York on Thursday with James Giddens, the trustee in charge of liquidating the brokerage and returning money to customers, for an update on the status of his investigation into what may be $1.2 billion missing from their accounts.

Class Action Suit Against MF, JPM and CME (pdf)

MF Has Distributed $3.8B to Date: Trustee
By Tiffany Kary - Bloomberg.com
MF Global Inc. (MF) has distributed about $3.8 billion so far and has about $1.5 billion under its control, while there’s still $1.2 billion missing, according to the trustee for the failed brokerage.
About 100 customers gathered today at the New York Marriott Downtown hotel to hear James Giddens, the trustee appointed to liquidate the brokerage, describe his investigation. A lawyer for the trustee said the probe has involved imaging more than 800 computer drives and maintaining over 100 terabytes of data, more information than the Library of Congress contains.

Fed’s image tarnished by newly released documents
By Zachary A. Goldfarb - WashingtonPost.com
The leaders of the Federal Reserve went around the room saluting Alan Greenspan during his last day as chairman of the central bank. Then Timothy F. Geithner, the future Treasury secretary, made a prediction.
"I’d like the record to show that I think you’re pretty terrific, too," Geithner, who was president of the Federal Reserve Bank of New York, told Greenspan amid laughter on Jan. 31, 2006. "And thinking in terms of probabilities, I think the risk that we decide in the future that you’re even better than we think is higher than the alternative."

Bill Gross Called an 'Oddball,' in Fed Transcript
By Caroline Salas Gage - Bloomberg.com
Richard Fisher, a Federal Reserve official, called billionaire investor Bill Gross an “oddball” at a 2006 meeting -- then asked to have the remark withheld from a transcript that was released today by the Fed.
"I’ve known Gross for 20 years, and I know he’s an oddball," Fisher, president of the Federal Reserve Bank of Dallas, said at the Oct. 24-25, 2006 meeting. "Actually, I’d like that word struck from the record."

El Erian: QE3 Won’t Work, Europe Poses Big Risk to U.S.
BY CRIS SHERIDAN - FinancialSense.com
El-Erian, CEO of the world's largest bond bund, spoke with Bloomberg on a range of issues. He rightly points out that QE3 will not work towards reducing unemployment and that Europe represents the largest economic region in the world, posing a significant headwind to the U.S. and elsewhere.
"The Fed doesn't have enough policy instruments to deal with the challenges facing the economy. So what they're trying to do now is use communication as an extra instrument. So we've used rates—they're now held at zero—we've had QE2, which is use of the balance sheet. Now we're seeing them use communication—trying to push investors to take on more risk. The problem as Mike points out is two-fold: one is there's disagreement on the FOMC, so the market hears the whole range of communication rather than one theme, and secondly it's not a very effective policy instrument; or, to put it differently, using Chairman Bernanke's words, there aren't just limited benefits, there's also costs and risks. The Fed is in a difficult position. It's trying to be active, and rightly so, but it doesn't have effective instruments at this stage.

U.S. Debt Nears $15.194 Trillion Ceiling
By Damian Paletta - WSJ.com
The Treasury Department has begun maneuvers to avoid hitting the debt ceiling, as the Obama administration waits for Congress to return from the holiday break before it can raise the federal borrowing limit.
The U.S. government was just a hair below the $15.194 trillion debt ceiling on Tuesday, $25 million shy of the limit Congress set last summer. President Barack Obama sent a letter to congressional leaders Thursday, saying the U.S. debt was within $100 million of the ceiling "and that further borrowing is required to meet existing commitments."

Obama Sends Request To Congress For $1.2 Trillion Debt Ceiling Increase
Submitted by Tyler Durden - ZeroHedge.com
Update:

• HOUSE TO VOTE JAN. 18 ON OBAMA'S DEBT-LIMIT INCREASE REQUEST

Two days ago we wondered how long it would take for Obama to restart the debt ceiling theater. Not that long it turns out.

• OBAMA SENDS CONGRESS REQUEST TO RAISE DEBT CEILING
• OBAMA NOTIFICATION STARTS 15-DAY CLOCK FOR CONGRESS TO VOTE

So with Congress in recess, will Obama succeed in passing another automatic vote using base trickery? The same Obama, who as recently as 3 hours ago warned Congress that any attempts to pass approval on the Keystone Pipeline without his involvement are "counterproductive"... In other news, America' new debt ceiling of $16.3 trillion, or 107% of GDP is now just a formality, about to be interrupted by a little circus clowning.

The Financial System is a Farce: Part Three
By: Eric Sprott & David Baker - Sprott Asset Management LP
2011 was a merry-go-round of more bailouts, more deferrals and more denial. Everyone is tired of the Eurozone. It’s not fixable. There’s too much debt. The politicians don’t know what’s going on. Nothing has structurally changed. We’re still on the wrong path. There’s more global debt than there was a year ago, and it’s the same old song: extend and pretend, extend and pretend,... around and around we go,... and it isn’t fun anymore.

Keiser Report: Death by Thousand Revelations (E235)

The 10 States With the Most Trouble Paying Their Bills
By 24/7 Wall St. - DailyFinance.com
Balancing the budget isn't just a federal problem -- it's a state one as well. The Great Recession resulted in some of the lowest state revenues in years, and some of the biggest budget shortfalls of all time. According to a report on state budgets by the Center for Budget Policy Priorities, dozens of states faced shortages of hundreds of millions -- or even billions -- ofdollars.
24/7 Wall St. examined the 10 states that had budget shortfalls of 27% or more of their generalfundsfor fiscal year 2011 -- the states that were short the most money before they balanced their budgets. For the most part, those with the worst budget gaps also had among the most anemic economies. And because of their budget problems, all of them have been forced to make dramatic cuts to government services.

Mortgage Refinancing Plan Would Harm Banks: Dick Bove
By: Michelle Fox - CNBC.com
Speculation that a new mortgage refinancing plan may be introduced drove bank stocks higher Thursday, but noted banking analyst Dick Bove believes investors actually got it wrong. He told Larry Kudlow that a program like that would actually "harm" banks.
"It’s bad for banks, it doesn’t help them in any way, shape or form," Bove said.
The speculation was fueled by reports that suggested the White House may be preparing a new trillion-dollar plan to refinance home loans. However, administration officials told CNBC’s Dana Olick that they are notconsidering a $1 trillion refinancing program.

30-year mortgage rate hits new low of 3.89%
By Jonathan O’Connell - WashingtonPost.com
Mortgage rates hit a new historic low this week, averaging 3.89 percent for 30-year fixed-rate loans and beating the previous record —matched just the week before — of 3.91 percent, according to weekly survey data released Thursday by Freddie Mac.
Early into 2012 rates remain well below where they were last year at this time, when the average 30-year rate was 4.71 percent, according to Freddie Mac. The average rate for a 30-year fixed-rate mortgage has remained below 4 percent for six straight weeks.

Bulk Foreclosure Sales Could Cause Bigger Bank Write-Downs
By: Diana Olick - CNBC.com
As government, federal regulators and big-money private investors try to figure out a plan for bulk sales of foreclosed properties, big banks are already making deals, but they are few and far between.
The trouble is, they are looking at even bigger write-downs than forecast if they sell these distressed properties in bulk.

Ahead of Crash, Fed Saw Little Threat From Housing
By: Reuters - CNBC.com
Federal Reserve Chairman Ben Bernanke and other top officials of the U.S. central bank missed the nation's oncoming housing crash, believing as late as December 2006 that the market was stabilizing, according to transcripts of policy meetings released on Thursday.
Policymakers were also far too sanguine about the potential threat housing posed to financial markets, the transcripts of the Fed's 2006 policy meetings show.
The bursting of the housing bubble led to the deepest recession since the Great Depression and triggered a banking crisis that brought down Wall Street giantsLehman Brothers and Bear Stearns.

Philly Fed revises December factory activity lower
(Reuters) - Factory activity in the U.S. Mid-Atlantic region grew at a slower pace than originally reported in December, the Philadelphia Federal Reserve Bank said on Thursday.
Annual revisions showed the Fed's factory activity index was at 6.8 in December, shy of the initial reading of 10.3.
Any reading above zero indicates expansion in the region's manufacturing. The survey covers factories in eastern Pennsylvania, southern New Jersey and Delaware and is seen as an early indicator of the health of U.S. manufacturing sector.

Jobless Claims in U.S. Rose More Than Forecast
By Shobhana Chandra - Bloomberg.com
More Americans than forecast filed applications for unemployment benefits last week, raising the possibility that a greater-than-usual increase in temporary holiday hiring boosted December payrolls.
Jobless claims climbed by 24,000 to 399,000 in the week ended Jan. 7, Labor Department figures showed today in Washington. The medianforecast of 46 economists in a Bloomberg News survey projected 375,000. The number of people on unemployment benefit rolls rose, while those receiving extended payments decreased.

Amid downturn,
more older Americans employed than ever before
By Peter Whoriskey - WashingtonPost.com
Amid the wreckage of the economic downturn, something curious happened to older Americans.
More of them are working.
Though the recession has thinned the ranksof other generations in the workforce, more people older than 55 are employed than ever before, according to the latest figures from the Bureau of Labor Statistics.

Keep Their Feet to the Fire
By Ben Shapiro - PatriotPost.us
Mitt Romney is an enormous squish. On the squish scale, he falls somewhere between Jabba the Hut and Slimer from Ghostbusters. He can't be trusted on conservative philosophy, and he can't be trusted to act as a principled conservative while in office.
And that may be the best thing for the conservative movement.
Since the days of Herbert Hoover, conservatives have rallied around Republican presidents. Republicans are their guys. No matter that Eisenhower prompted the growing power of Arabism in the Middle East; no matter that Nixon imposed price and wage controls and kowtowed to China; no matter that Reagan raised taxes after cutting them; no matter that George H.W. Bush raised taxes after promising not to; no matter that George W. Bush imposed steel tariffs, created a massive new entitlement program, blew up the education budget and bailed out Wall Street. They were our guys.

U.S. Postal Service Sued
for Allegedly Blocking Probe of Campaign Mailings
By Joel Rosenblatt - Bloomberg.com
The U.S. Postal Service was accused by a political watchdog group of improperly blocking a freedom- of-information request seeking the source of negative campaign mailings in a California school-board recall election.
In a lawsuit filed today in federal court in Sacramento, California, the California Fair Political Practices Commission claimed the Postal Service improperly blocked its probe of William Eisen, a former member of the Manhattan Beach Unified School Board.

Food Lion’s owner closing 126 stores, retiring Bloom banner
By Danielle Douglas - WashingtonPost.com
Delhaize America, the Belgian owners of the Food Lion, Bloom and Bottom Dollar Food grocery chains, is taking some dramatic steps to shore up its portfolio of stores.
The company is closing 126 underperforming stores within 30 days, discarding the Bloom banner and shutting down its distribution center in Tennessee. About 4,900 store employees will be displaced as a result of these actions.

The Most-Often Overlooked Tax Deductions
By Kiplinger - DailyFinance.com
Years ago, the fellow who was running the IRS at the time toldKiplinger's Personal Finance magazine that he figured millions of taxpayers overpaid their taxes every year by overlooking just one of the money-savers listed here.
Cut your tax bill to the bone by claiming all the breaks you deserve -- including some you may have forgotten, and some you may have never even known about.

Epic to FTC: Google Search+ is violating users' privacy
Privacy watchdog that had successfully challenged the search giant over Buzz now calls on regulators to probe Google+
By Dominic Rushe - Guardian.co.uk
An influential privacy watchdog has asked the US government to investigate Google+, the search giant's social network, claiming it may violate people's privacy and raises anti-trust concerns.
In a letter to the Federal Trade Commission, the Electronic Privacy Information Center (Epic) says it is concerned about the changes Google has made to its service since the launch of Google+.

IBM Brains Turn 12 Atoms Into World’s Smallest Storage Bit
By Robert McMillan - Wired.com
IBM researchers have found a way to put a single bit of data on a 12-atom surface, creating the world’s smallest magnetic storage device.
It’s a breakthrough that’s not likely to make its way into hard drives or memory sticks for decades, but it gives us a hint at how much road lies ahead for magnetic storage devices.
Before now, physicists really didn’t know how small they could take magnetic storage before the laws of quantum mechanics would take over, making it impossible to reliably store data. String together 8 atoms, for example, and you simply can’t get a stable magnetic state, says Andreas Heinrich, the IBM researcher behind the discovery. "The system will just spontaneously hop from one of those states to another state in a timescale that is too fast for us to claim anything like a data storage [demonstration]. It might be switching 1,000 times per second."

Bain Capital Owns Clear Channel
(Rush Limbaugh, Sean Hannity,
Glenn Beck, Michael Savage, Etc.)
EndOfTheAmericanDream.com
Wouldn't it be great if a Republican presidential candidate could just buy the support of just about every major conservative talk show host in America? Well, it may not be as far-fetched as you may think. Clear Channel owns more radio stations (850) than anyone else in the United States. They also own Premiere Radio Networks, the company that syndicates the radio shows of Rush Limbaugh, Sean Hannity, and Glenn Beck, among others. Needless to say, Clear Channel basically owns conservative talk radio in the United States. So who owns Clear Channel? Well, it turns out that Bain Capital is one of the primary owners of Clear Channel. Yes, you read that correctly. The company that Mitt Romney ran for so long is one of the "big bosses" over virtually all conservative talk radio in America. Of course Mitt Romney is not running Bain Capital anymore. He is a "retired partner", but he still has a huge financial stake in Bain Capital. We're talking about millions upon millions of dollars. If you doubt this, just check out page 34 of this public financial disclosure report. So if you have been wondering why so many conservative talk show hosts are being so incredibly kind to Mitt Romney, this just might be the answer.

Xbox assembly workers in China
threaten mass suicide over jobs dispute
Unrest at Foxconn Technology plant defused but worker discontent highlights widespread unrest in China's economy
AP - Guardian.co.uk
Dozens of workers assembling Xbox video game consoles climbed to a factory dormitory roof, and some threatened to jump to their deaths, in a dispute over jobs that was defused but highlights growing labour unrest as China's economy slows.
The dispute boiled over last week after contract manufacturer Foxconn Technology Group said it would close the production line for MicrosoftCorp's Xbox 360 consoles at its plant in the central city of Wuhan and transfer some workers to other jobs, workers and Foxconn said Thursday.

Military Networks ‘Not Defensible,’
Says General Who Defends Them
By Noah Shachtman - Wired.com
The Defense Department’s networks, as currently configured, are "not defensible," according to the general in charge of protecting those networks. And if there’s a major electronic attack on this country, there may not be much he and his men can legally do to stop it in advance.
Gen. Keith Alexander, head of both the secretive National Security Agency and the military’s new U.S. Cyber Command, has tens of thousands of hackers, cryptologists, and system administrators serving under him. But at the moment, their ability to protect the Defense Department’s information infrastructure — let alone the broader civilian internet — is limited. The Pentagon’s patchwork quilt of 15,000 different networks is too haphazard to safeguard.

Defense Spending Is a Shovel-Ready Investment
By Victor Davis Hanson - PatriotPost.us
President Obama just ordered massive cutbacks in defense spending, eventually to total some $500 billion. There is plenty of fat in a Pentagon budget that grew after 9/11, but such slashing goes way too far.
Fairly or not, the cuts will only cement a now familiar stereotype of Obama's desire to retrench on the world scene. They follow symbolic apologies for purported past American sins, bowing to foreign royals, and outreach to the likes of Iran and Syria. Abroad, such perceptions can matter as much as reality, as our rivals begin hoping that Obama is as dubious about America's historically exceptional world role as are they.

US marines accused of war crimes
Video posted anonymously on YouTube claims to show American troops in Afghanistan urinating on dead bodies
By Chris McGreal in Washington - The Guardian
US forces in Afghanistan are facing fresh accusations of war crimes after film emerged which appears to show American marines urinating on dead bodies and laughing.
The US military command in Kabul, which was severely embarrassed last year by revelations that Americans soldiers were running a "kill squad" murdering Afghan civilians, said it would investigate the undated video, and that if it proved to be authentic, desecration of corpses would be regarded as a serious crime. Despoiling of the dead is illegal under the Geneva conventions as well as under US military law.

Surprising response.... or lack thereof
Taliban Shrugs at Video of Marines Urinating on Corpses
By Spencer Ackerman - Wired.com
A sign of the times, perhaps, in Afghanistan: When a video appears purporting to show Marines urinating on the corpses of Afghans, the U.S. military denounces it more strongly than the Taliban does. So far, Afghan reaction overall has been muted, and now there might not be insurgent propaganda to fan outrage. Could Afghans — even Afghan militants — be that jaded with the U.S. after 10 years of war?
The video has all the ingredients of a scandal. It shows, apparently, desecration of corpses by laughing service members. It’s gone viral. And it occurs in the context of a grueling war that requires Afghan support.

Police to investigate MI6 over rendition and torture of Libyans
Criminal inquiry announced as DPP says there is not enough evidence to prosecute agents over Pakistan and Afghanistan allegations
By Ian Cobain - Guardian.co.uk
Scotland Yard has opened a criminal investigation into secret MI6rendition operations that resulted in leading Libyan dissidents being abducted and flown to Tripoli where they were subsequently tortured in Muammar Gaddafi's prisons.
The announcement came as police and the director of public prosecutions, Keir Starmer, said there was insufficient evidence to prosecute any individual MI5 or MI6 officers following lengthy investigations into allegations of British complicity in the torture of terrorism suspects in Pakistan and Afghanistan.

Egypt's Muslim Brotherhood
enters 'uncharted waters' in new parliament
Islamist party is poised to take 45% of seats amid soaring public expectations but with few concrete powers to deliver reform
By Jack Shenker in Cairo - Guardian.co.uk
It's a triumph that's been 84 years in the making and, despite a concerted effort by all involved to stay humble and on-message during their movement's finest hour, few members of Egypt's Muslim Brotherhood can hide their exhilaration.
"These elections are a historic milestone for us and they are a historic milestone for Egypt," said Amr Darrag, secretary general of the Brotherhood's Freedom and Justice party in Giza. "We've not had such free elections since 1952, so it's a great moment for the nation," he said. "The Egyptian people really intend to seize this moment and secure the position for Egypt that it so clearly deserves."

George Mitchell on the Iran Crisis
By Jeffrey Goldberg - TheAtlantic.com
Goldblog just finished interviewing the former Obama Middle East envoy, Sen. George Mitchell, as part of an Atlantic Exchange event here at The Atlantic's glass-enclosed nerve center overlooking the Potomac. (This was event was held in conjunction with the S. Daniel Abraham Center for Middle East Peace, which produced the "Is Peace Possible?" feature on the Atlantic.com site.) I'll post some more of Mitchell's statements tomorrow, but here's an exchange about the most urgent issue of the moment. Mitchell is definitely a non-hawk on the issue of using military force to stop the Iranian nuclear program:
Jeffrey Goldberg: What are the consequences for the Middle East, and for the peace process in particular, of a nuclear-armed Iran? And what do you think the consequences are of a preemptive strike by Israel, or by the United States, to stop Iran--or at least delay Iran -- from developing nuclear weapons?

Geithner Gets Japan Backing on Iran After China Snub
By Toru Fujioka and Aki Ito - Bloomberg.com
U.S. Treasury Secretary Timothy F. Geithner’s efforts to tighten economic sanctions on Iran over its nuclear program won backing from Japan after China rejected limiting oil imports from the country.
"We want to take concrete steps to reduce our share in an orderly way as soon as possible," Finance Minister Jun Azumi said at a joint press conference in Tokyo yesterday with his U.S. counterpart. "The world cannot tolerate nuclear development."

Iranian paper calls for retaliation against Israel
By NASSER KARIMI - AP.org
TEHRAN, Iran (AP) -- A hard-line Iranian newspaper called Thursday for retaliation against Israel, a day after the mysterious killing of a nuclear scientist in Tehran with a magnetic bomb attached to his car. Iran's top leader blamed Israel and the U.S.
Provocative hints from Israel reinforced the perception that the killing was part of an organized and clandestine campaign to set back Iran's nuclear ambitions, which the U.S. and its allies suspect are aimed at producing weapons. Iran says the program is for peaceful purposes only.

Iran nuclear sites may be beyond reach of "bunker busters"
(Reuters) - With its nuclear program beset as never before by sanctions, sabotage and assassination,Iran must now make a new addition to its list of concerns: One of the biggest conventional bombs ever built.
Boeing's 30,000-pound Massive Ordnance Penetrator (MOP), an ultra-large bunker buster for use on underground targets, with Iran routinely mentioned as its most likely intended destination, is a key element in the implicit U.S. threat to use force as a last resort against Iran's nuclear ambitions.

U.S. military moves carriers, denies Iran link
By Phil Stewart
(Reuters) - The U.S. military said on Wednesday that a new aircraft carrier strike group had arrived in the Arabian Sea and that another was on its way to the region, but denied any link to recent tensions with Iran and portrayed the movements as routine.
The shift in the powerful U.S. naval assets comes at a moment of heightened tensions with Iran, which has threatened to close the Strait of Hormuz - the world's most important oil shipping lane - if U.S. and EU sanctions over its nuclear program cut off its oil exports

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Thursday 01.12.2012

Gold & Silver: Deflationary downward wave
By Clive Maund - CommodityOnline.com
The last few weeks have been confusing. And that was the clear contradiction between the bearish price patterns that emerged in the case of Gold and Silver (and to a large top and a brutal wave of deflationary downward pointing) and the seemingly bullish Commitments of Traders (COT) structure in the precious metals sector. For the COT developments, we now seem to have an explanation, which we discuss later. But first let's take a look at the development of price patterns.

China’s 2012 Gold Panic
China's latest gold figures look unrelentingly bullish.
Too bullish perhaps…
BY ADRIAN ASH - FinancialSense.com
So "Growth has [now] replaced inflation as Beijing's top policy concern," says Qu Hongbin, Asian economics expert at HSBC in Hong Kong, forecasting three cuts to China's banking reserve requirements by July.
"There is developing in Beijing, I think, almost a panic about global economic prospects and the impact of the European crisis on China," agrees Michael Pettis, finance professor at Peking University. He goes one further and forecasts debate – if not the fact – of a currency devaluation in 2012.

Charting the gold price back to the year 1265
CommodityOnline.com
We have often seen requests to show the price of Goldgoing back as long as possible. The graph shown below is a gold price chart, indexed in 2010 British Pounds and going all the way back to the year 1265.
To the surprise of many, the 'early 1980's gold price surge' is not the only time in history when gold exploded as America's game with inflation was almost lost. It appears that based on the surge in gold back in the late 15th century, there was actually quite a serious need for Columbus to go forth and find a source of gold, because last we checked Ferdinand and Isabella did not have Bernanke's money printers back then.

Bob Chapman - Radio Liberty - 09 January 2012

China’s Gold Imports From Hong Kong
Climb to Record on Investment Demand
By Bloomberg News
China’s gold imports from Hong Kong surged to a record as consumers bought the metal before the Lunar New Year this month and investors sought to hedge against financial turmoil. Bullion rallied to a four-week high.
Mainland China bought 102,779 kilograms from Hong Kong in November, up from 86,299 kilograms in October, according to theCensus and Statistics Department of the Hong Kong government. China doesn’t publish gold trade data

Will silver drive the rally in 2012?
By Jared Cummans - CommodityOnline.com
Silver has been one of the most talked about commodities over the past few years thanks to its massive price swings. After a dismal 2008, Silver prices soared for the next two years including an approximate 80% appreciation in 2010 alone and in 2011, which brought silver back down to earth despite impressive spikes intra-year. With losses piling up to more than 10% in the previous year, investors were quick to sell out of the flailing precious metal. Silver’s poor performance, however, came as a major surprise especially considering that Gold was up by about the same margin that silver surrendered. But now that 2012 is underway, silver may be poised for another break-out year.

The Ponzi Debt Bubble Leaves Only Two Options
BY KARL DENNINGER - FinancialSense.com
Contemplate this chart a bit. [see chart online]
This shows you what the stock market (S&P 500) did, along with the expansion in both GDP and debt (leverage) during that time. The debt expansion was a geometric series from roughly 1990 forward until it hit the wall in 2007.
It may not be intuitively obvious when you look at that chart, but this is what was happening. The data is a bit "noisy" as the granularity is quarterly, and of course there are small recessions and such in there, but on balance this entire "expansion" was in fact false --during this entire period, from 1980 forward until the crash, we did not have one three month period where economic growth occurred at a faster gross dollar amount than did new debt.

Banking system crisis- Paul Craig Roberts
On the Edge with Max Keiser-01-06-2012

U.S. runs in the red for 39th straight month
By Stephen Dinan-The Washington Times
The federal government ran a deficit in December, marking the 39th straight month in the red, according to preliminary estimates Monday by theCongressional Budget Office, continuing a streak that dates back to the last days of PresidentGeorge W. Bush and encompasses PresidentObama’s entire term.
And in a bad sign, December’s deficit of $84 billion was slightly worse than the deficit in December 2010, reversing a trend that had seen a slightly improved picture over the previous few months.

24 Statistics To Show
To Anyone Who Believes T
hat America Has A Bright Economic Future
TheEconomicCollapseBlog.com
Beware of bubbles of false hope. Right now there is a lot of talk about how the U.S. economy is improving, but it is all a lie. The mainstream media can be very seductive. When you sit down to watch television your brain tends to go into a very relaxed mode. In such a state, it becomes easy to slip thoughts and ideas past your defenses. Sometimes when I am watching television I realize what the media is trying to do and yet I can still feel it happening to me. In this day and age, it is absolutely critical that we all think for ourselves. When you look at the long-term trends and the long-term numbers, a much different picture of the U.S economy emerges than the one that is painted for us on television. Over the long-term, the number of good jobs in America has been steadily going down. Over the long-term, the number of Americans living in poverty and living on food stamps has been steadily going up. Over the past couple of decades, tens of thousands of businesses, millions of jobs and trillions of dollars of our national wealth have gone out of the country. Our debt is nearly 15 times larger than it was 30 years ago, and U.S. consumer debt has soared by 1700% over the past 40 years. Year after year the rate of inflation goes up faster than our incomes do, and this is absolutely devastating the middle class. Anyone who believes that we can keep doing the same things that we have been doing and yet America will still have a bright economic future is delusional. Until the long-term trends which are taking the U.S. economy straight into the toilet are reversed, any talk of a bright economic future is absolute nonsense.

For those hurting most, Fed’s remedies limited
By Neil Irwin - WashingtonPost.com
In the most difficult economy in a generation, middle-income and poor Americans are hurting the worst. Congress is tied in knots, barely able to pass even the most basic measures to help.
That has put pressure on the one arm of government with the power and the flexibility to try to boost ordinary Americans’ fortunes: the Federal Reserve. But the limited policies the Fed has at its disposal mostly put money in the hands of the affluent, at least through their direct effects. The affluent, in turn, are less likely than most to spend that money in the wider economy.

U.S. sells 10-year debt at lowest-ever yield
Treasury's gain after record-setting auction
Federal Reserve’s Beige Book notes moderate growth
By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices advanced on Wednesday, pushing yields down, after the government sold benchmark 10-year notes for under 2% for the first time ever.
Ten-year yields, which move inversely to prices, fell 6 basis points to 1.91%. A basis point is one one-hundredth of a percentage point.
Thirty-year bond yields declined 6 basis points to 2.96%, dropping under the key 3% level.

Japan and Canada warn on Volcker rule impact
Last-ditch push against prop trading controls on sovereigns
By Tom Braithwaite and Michael Mackenzie in New York, Ben McLannahan in Tokyo and Shahien Nasiripour in Washington - FT.com
Foreign governments and asset managers are mounting a last-ditch push against the US Volcker rule, worried that the proposed ban on proprietary trading could exacerbate a liquidity crunch.
Japanese and Canadian regulators have warned the US government that the rule, which is due to be finalised within weeks and put into force in July, could harm world markets by preventing or deterring US banks such as Goldman Sachs from trading.

Spanish Banks Undermine Recovery
With Discriminatory Home Loans: Mortgages
By Sharon Smyth - Bloomberg.com
Spain’s banks, saddled with 329,000 foreclosed homes, are still willing to provide mortgages, as long as the borrower wants to buy one of their properties, according to a consumer-rights group. That’s no help to homeowners and developers seeking to sell.
Members of the group, Organización de Consumidores y Usuarios, or OCU, applied for mortgages at 46 bank branches in Spain in August and September to buy privately-owned homes. In every case, the lender tried to persuade the prospective borrower to purchase one of its own properties instead -- either by offering to finance 100 percent of the price or by refusing to lend for another home, spokeswoman Ileana Izverniceanu said.

Economic crisis means
the Mafia is now 'Italy's number one bank'
By James Mackenzie - NationalPost.com
ROME — Organized crime has tightened its grip on the Italian economy during the economic crisis, making the Mafia the country’s biggest "bank" and squeezing the life out of thousands of small firms, according to a report on Tuesday.
Extortionate lending by criminal groups had become a "national emergency," said the report by anti-crime group SOS Impresa.
Organized crime now generated annual turnover of about €140-billion ($178.89 billion) and profits of more than €100-billion, it added.

More proof that Obama's regulatory leaders
are saving elite financial criminals
By Bill Black - NakedCapitalism.com
The New York Times published a column by its leading financial experts, Gretchen Morgenson and Louise Story, on November 22, 2011 which contains a spectacular charge against the Obama administration’s financial regulatory leaders. I have waited for the rebuttal, but it is now clear that the administration does not contest the charge.
The specific example that prompted the NYT article (“Financial Finger-Pointing Turns to Regulators”) was a civil action against a former executive of IndyMac. IndyMac was supposed to be regulated by the Office of Thrift Supervision (OTS). OTS was the worst of the federal financial regulators – which is a large statement. It was so bad that the Dodd-Frank Act killed it. I used to work for OTS. One of the things I did to make myself unemployable during the S&L debacle was to testify before Congress against the head of our agency, Danny Wall, and our head of supervision, Darrell Dochow. Wall resigned in disgrace and Dochow was demoted and sent back to run the obscure office he had once run in Seattle.

Too-Big-to-Fail Bank Definition
May Be Expanded by Regulators
By Ben Moshinsky and Jim Brunsden - Bloomberg.com
Global regulators may expand the definition of a too-big-to-fail financial firm, signing up domestic lenders, clearing houses and insurers to capital rules designed for the world’s biggest banks.
The "framework should be in place for domestically systemically important banks by the end of the year," Mark Carney, chairman of the Financial Stability Board, said yesterday after a meeting of the group inBasel, Switzerland.

China bank regulator bans some derivative sales
By Rose Yu
SHANGHAI (MarketWatch) -- China's banking regulator has banned the sale of commercial paper-backed products by trust companies, in another bid to crack down on shadow financing, four people familiar with the situation said Thursday.
The China Banking Regulatory Commission's branches across the nation told trust companies to stop selling such investment products Wednesday, said the people, who declined to be named. The people added it isn't clear when the ban will be lifted.

Growing wealth divide puts globalization at risk
By Ben Hirschler
(Reuters) - A backlash against rising inequality - evident from the Occupy movement to the Arab Spring - risks derailing the advance of globalization and represents a threat to economies worldwide, according to the World Economic Forum.
Severe income disparity and precarious government finances rank as the biggest economic threats facing the world, according to the group's 2012 Global Risks report released on Wednesday.

Corzine Sued by Montana Farmers
Over MF Global Futures Account Money
By Karen Gullo - Bloomberg.com
Jon Corzine, former chief executive officer of collapsed commodity brokerage MF Global Holdings Ltd. (MFGLQ), was sued for fraud byMontana farmers who claim he oversaw the misappropriation of their commodity trading account funds.
The lawsuit filed today by three farmers and a cattle- raising operation in Montana seeks to represent a nationwide group of commodities futures customers whose money went missing amid the $41 billion bankruptcy of MF Global, parent of the futures brokerage that is being liquidated. A trustee is looking for $1.2 billion or more in money missing from commodity customers’ accounts.

The Neverending MF Global Story:
Regulators Block The Truth
By Francine McKenna, Contributor - Forbes.com
Instead of looking out forMF Global investors – and customers who are still waiting for their money – it looks like regulators and the bankruptcy trustees are busy suppressing information. Instead of full transparency, regulators and the trustees are holding onto crucial details that might tell us all who was asleep at the wheel when the broker/dealer and futures commission merchant (FCM) headed over the cliff.

Bankrupt Solyndra seeking to pay bonuses
Court’s OK sought for 'incentive plan'
By Jim McElhatton-The Washington Times
Now seems an unlikely time for handing out bonuses at bankrupt Solyndra LLC, but that’s the plan of company attorneys intending to dole out up to a half-million dollars to persuade key employees to stay put.
Nearly two dozen Solyndra employees could receive bonuses ranging from $10,000 to $50,000 each under a proposal filed by Solyndra’s attorneys in U.S. Bankruptcy Court in Delaware.
The attorneys say the extra money will add motivation at a time when workers at the solar company have little job security and more responsibilities because so many of their colleagues have been fired.

Trouble Is Brewing for Office Market
By CRAIG KARMIN And ELIOT BROWN - WSJ.com
Penn Mutual Towers, an office complex across the street from Independence Hall in Philadelphia, has seen its vacancy rise and income fall after one big tenant left and another renewed its lease for 15% less than it had been paying. Its creditors are foreclosing on the property, according to data company Trepp LLC.
Similar problems are mushrooming in office markets throughout the country, foreshadowing a new wave of real-estate trouble.

The Housing Bubble and the Economic Crisis
What Greenspan Should Have Done
by DEAN BAKER - CounterPunch.org
In Washington policy circles, money and influence can be used to make even the most simple and obvious things complicated and confusing. This is certainly the case with the housing bubble and its aftermath. Four years into the housing bubble downturn, much of the country remains hopelessly confused about what happened, why it happened and who is to blame.
First, what happened is very straightforward. We had a huge run-up in house prices that had no basis in the fundamentals of the housing market. After 100 years in which nationwide house prices just kept even with the overall rate of inflation, house prices began to sharply outpace inflation beginning in the late 90s. By 2002, when some of us first noticed the bubble, house prices had already risen by more than 30 percentage points in excess of inflation. By the peak of the bubble in 2006, the increase in house prices was more than 70 percentage points above the rate of inflation.

Bernanke Doubling Down on Housing Bet
Asks Government to Help: Mortgages
By Jody Shenn - Bloomberg.com
Ben S. Bernanke is signaling his willingness to double down on a three-year bet that’s failed to revive housing, showing the extent of the Federal Reserve chairman’s effort to wrest a recovery from the deepest recession.
Since the Fed started buying $1.25 trillion of mortgage bonds in January 2009, the value of U.S. housing has fallen 4.1 percent, and is down 32 percent from its 2006 peak, according to an S&P/Case-Shiller index. The central bank is poised to buy about $200 billion this year, or more than 20 percent of new loans, as it reinvests debt that’s being paid off. Some Fed officials have said they may support additional purchases that Barclays Capital estimates could total as much as $750 billion.

Hostess returns to bankruptcy over pensions
(Reuters) - Twinkies and Wonder Bread maker Hostess Brands Inc filed for bankruptcy protection for the second time in less than three years, after failing to reach an agreement with workers on pension and health benefits.
Hostess' declining financial performance, crippling legacy costs associated with its pension plans and massive debt levels led the company to Chapter 11 bankruptcy, court papers showed on Wednesday.
The company, which has about $860 million in debt, said it does not expect disruptions in the manufacturing and delivery of its products during the bankruptcy process.

Hostess Files for Bankruptcy, but the Twinkie Will Never Die
With the food manufacturer in jeopardy, let us consider the wonderful international complex behind the making of the Twinkie
By Derek Thompson - TheAtlantic.com
The Twinkie is indestructible (or so we're told), but the imperishable treat's maker is in danger of succumbing to that most common of economic forces: Health care and pension costs.
Hostess Brands, the maker of Twinkies, Ding Dongs, and Wonder Bread, announced that it is filing for bankruptcy for the second time in less than ten years due to expensive legacy pensions and medical obligations for its 19,000 employees in 49 states. Deep in debt, Hostess is also forced to weigh the rising cost of ingredients against falling demand for its sticky treats. Last year, inflation for sugar (21%) and wheat (69%) took ingredient costs to all-time highs while Twinkie sales declined by 2%.

US consumer credit borrowings
hit 10 year high in November amidst a financial crisis
NEW YORK (Commodity Online): The US consumer credit growth for November came in at over $20 billion. This is a record 10% increase in a month, the most in almost 10 years.
Revolving credit (mostly credit cards) usage grew for the third consecutive month by $5.60 billion. Non-revolving credit (mostly auto mobile and student loans) rose $14.78 billion adjusted seasonally.

Smart TVs: The next tech war is in the living room
By Hayley Tsukayama - WashingtonPost.com
Hawking their wares at the Consumer Electronics Show this week, the world’s top television manufacturers are bent on making a splash: They’re trying to sell a whole new approach to television.
In a world where the latest gadgets are automatically expected to be hooked up to technology "ecosystems" — apps, Internet connectivity and access to social networks -- television makers are banking on the fact that couch potatoes will want to see their friendly living-room TV get in on the act.

Education's Medicaid Problem
More bad news for privileged public employee teachers.
By RISHAWN BIDDLE - The American Spectator.org
These days, there is plenty of wrangling over the future of America's woeful traditional public schools. Inside the Beltway, congressional Republicans, Senate Democrats, and President Barack Obama are in a stalemate over the reauthorization of the No Child Left Behind Act. Obama will also have to defend his school reform legacy against any one of the Republican presidential aspirants who becomes the nominee (who, in turn, will have to distance himselffrom the school reform mantle of George W. Bush, upon whose efforts Obama has built his own).

Underwater Homeowners May Swim Freely
by Lena Groeger - ProPublica.org
Prevailing wisdom has it that homeowners who owe more on their mortgages than their houses are worth -- known as being "underwater" -- are forced to stay put because the property is too difficult to sell. So people who would otherwise relocate -- say, to find a job -- are "tethered to their homes." It's a theory touted by prominentNew York Times columnist Thomas Friedman, Harvard economist Lawrence Katz, and regularly makes appearances in the media.
But according to economist Sam Schulhofer-Wohl at the Federal Reserve Bank of Minneapolis, they've all got it backwards: underwater homeowners are actually more likely to move.

10 Shocking Home Invasion Horror Stories
That Are Almost Too Creepy To Believe
EndOfTheAmericanDream.com
Is your home secure? Are you absolutely sure? There are very few things that are more terrifying than having your home invaded. In fact, many people are never able to feel completely safe in a home again after it has been invaded. Our homes are supposed to be our fortresses. They are where we keep our families and our most cherished possessions safe. Unfortunately, due to the declining economy the number of truly desperate people out there continues to rise. When people become truly desperate, they will often find themselves doing things that they never dreamed that it would be possible for them to do. Hopefully the shocking home invasion stories in this article will motivate you to take action. We all need to learn how to protect ourselves and our families. For a long time the incredible prosperity that we enjoyed in this nation helped to mask the nightmarish moral decline that was taking place. But now that hard times have hit, we are starting to see the fabric of society come apart. All over the United States homes are being invaded, and some of these home invasions are almost too creepy to believe.

12 Infected With New Swine Flu Strain
By JASON KOEBLER - USNews.com
The days of medical masks at airports and widespread panic may be coming back—that's because at least 12 humans are believed to have been infected with a new strain of swine flu that's not covered by this season's vaccine.
The new swine flu strain, H3N2v, has shown at least some potential for human-to-human transmission in those 12 individuals, which makes it especially dangerous. Between 2009 and mid-2010, more than 17,000 people died worldwide from the highly contagious H1N1 swine flu strain, leading the World Health Organization to call the strain a pandemic.

Saving the Post Office: The Models of Kiwibank and Japan Post
by: Ellen Brown, Truth-out/org
Neither rain nor sleet nor snow may have stopped the Pony Express, but the nation's oldest and second-largest employer is nowunder attack. Claiming the United States Postal Service (USPS) is bankrupt, critics are pushing legislation that would defuse the postal crisis bybreaking the backs of the postal workers' unions and mandating widespread layoffs. But the "crisis" is an artificial one, created by Congress itself.

Killing America’s Dreams, One Lousy Concept Car at a Time
By Joel Johnson, Jalopnik - Wired.com
Concept cars aren’t just wank jobs of empty, aspirational futurism. They’re goal posts. They’re psychedelic mind-expanding drugs made of carbon-fiber and starlight. They stand as examples of not just where a car company could go, but where — barring a collective public gasp at an engineer’s daydream gone overly onastic — American culture will go once technology and manufacturing capability allow.
So as I sit here at the Detroit auto show, I wonder: Why have American automakers stopped dreaming?

* * * * *

Don't be Conned by the NIA -- Do not promote their videos

Homeland Security watches Twitter, social media
....Also Monitoring The Drudge Report, The New York Times
By Mark Hosenball
(Reuters) - The U.S. Department of Homeland Security's command center routinely monitors dozens of popular websites, including Facebook, Twitter, Hulu, WikiLeaks and news and gossip sites including the Huffington Post and Drudge Report, according to a government document.
A "privacy compliance review" issued by DHS last November says that since at least June 2010, its national operations center has been operating a "Social Networking/Media Capability" which involves regular monitoring of "publicly available online forums, blogs, public websites and message boards."

Election Industry in Crisis as Romney Romps Home
by ALEXANDER COCKBURN - CounterPunch.org
He stuck his foot in his mouth a couple of times in the final days, but on Tuesday millionaire Mormon Mitt Romney cantered past the winning post in the New Hampshire primary with 39 per cent of the votes cast. Libertarian Ron Paul ran second with 23 per cent. Another millionaire Mormon, Jon Huntsman, got 17 per cent. Floundering abjectly in the mire of defeat were Newt Gingrich (ten per cent) and the headline snatcher in Iowa a week ago, Rick Santorum (nine per cent.)

The Mythical Middle in American Politics
By Terence Jeffrey - PatriotPost.us
Why did the Democrats run Bob Casey Jr. in Pennsylvania in 2006 against Sen. Rick Santorum?
Why did President George W. Bush win a higher percentage of the African-American vote in Ohio in 2004 than he won nationwide?
Why did Proposition 8 win in California in 2008, while Sen. John McCain was losing the state in the presidential election?
The answer: The middle in American politics is not where the liberal media or establishment Republicans want you to think it is.

Obama or More of the Same
By Greg Hunter’s USAWatchdog.com
Mitt Romney, who finished first in New Hampshire last night, got a raw deal from the mainstream media (MSM) and his Republican opponents about a comment that was totally taken out of context. It was reported that Mitt Romney said, "I like to fire people." That would make you think he was some sort of cold hearted person who doesn’t care about people. What Romney actually said was in the context of health care providers and being able to fire companies who give you bad service. Romney actually said, "I like to be able to fire people who provide services to me." I agree with Romney on this one. This was a totally false representation of what Governor Romney said, and everyone who carried this story and used this in a campaign should be ashamed.

Why Banks Back SOPA,
the "Bring the Chinese Internet to America" Bill
NakedCapitalism.com
Although lots of technology-related sites are correctly up in arms about the Stop Online Piracy Act, the MSM has given it short shrift, and the financial blogosphere has not paid much attention (cross posts of some of George Washington articles being a welcome exception).
SOPA and PIPA (Protect IP Act) use nuclear-weapon-to-kill-a-mouse scale solutions to Internet piracy. David Carr in the New York Times, in an rather anodyne article given what is at stake,gave an overview of what is wrong with the bills, namely, a lot. Even if you accept the proponents’ dubious claims about the losses from "rouge" foreign websites ($58 billion!), the bills probably won’t fix that problem and will create a host of new ones. Despite assertions that it would create jobs, it would actually deter technology startups, undermine scientific journals, and could fragment the Internet domain name system. It’s tantamount to making the public wear ankle bracelets to combat shoplifting.

Champions of Freedom
By John Stossel - PatriotPost.us
It's election season, and so once again people look for heroes. Is Ron Paul one? Maybe. He's fought a long, lonely battle to limit the power of government. As government grows, I yearn for champions of freedom who fight back. Rep. Paul has done that.
But it's a mistake to look for heroes in politics. It's too ugly a business. My heroes are people like Milton Friedman, F.A. Hayek and Ayn Rand.

Almost 1 In 3 U.S. Warplanes Is a Robot
By Spencer Ackerman and Noah Shachtman - Wired.com
Remember when the military actually put human beings in the cockpits of its planes? They still do, but in far fewer numbers. According to a new congressional report acquired by Danger Room, drones now account for 31 percent of all military aircraft.
To be fair, lots of those drones are tiny flying spies, like the Army’s Raven, that could never accommodate even the most diminutive pilot. (Specifically, the Army has 5,346 Ravens, making it the most numerous military drone by far.) But in 2005, only five percent of military aircraft were robots, a report by the Congressional Research Service notes. Barely seven years later, the military has 7,494 drones. Total number of old school, manned aircraft: 10,767 planes.

U.S. Drone War Returns to Pakistan (And It Ain’t Stopping)
By Spencer Ackerman - Wired.com
For the first time since a deadly U.S.-Pakistani firefight drove relations between the two uneasy allies into the toilet, a missile fired by a drone slammed into a North Waziristan target. Surprise! Washington-Islamabad acrimony isn’t enough to stop the drone war.
Four people were killed near Mirin Shah in the first drone strike since Nov. 16. In the interim, 24 Pakistani soldiers died in a U.S. helicopter strike during a raid by U.S. commandos on a village near the Pakistan border; a military inquiry determined the Pakistanis had fired persistently on the commandos. The drone war has effectively been on pause to let U.S. diplomacy with Islamabad regroup

Clinton's Tone Deaf US Foreign Policy Announcements
Create New Provocations in Asia
Encircling China
by ALICE SLATER
On UN Day, at a panel on Nuclear Disarmament, Secretary General Ban-ki Moon spoke about his 2008 five point proposal for nuclear disarmament, including the requirement for negotiations to ban the bomb. It was dismaying when the next speaker, a retired US Air Force General, Michal Mosley, breezily assured the audience and his fellow panelists that it certainly was now possible to rid the world of nuclear weapons, since atomic bomb technology is thoroughly out of date. He boasted that today “we” have long range attack weapons of such "unbelievable precision and lethality" that we no longer need nuclear weapons in the US arsenal. Our conventional weapons are ever so superior to those of any other nation. He said this as his fellow co-panelists, the Russian and Chinese ambassadors, took in the full import of his braggadocio, to my extreme embarrassment as a US citizen. Did the General consider for a moment the effect his words were having on the Ambassadors and the other non-US participants in the meeting? His astonishing disregard for the effect of such provocative war talk on our fellow earth mates seems to be a major failure of our "tin ear" foreign policy.

Iran: Oh, No; Not Again
by CMartenson
In each of the years 2008, 2009, and 2010, significant worries emerged that Western nations might attack Iran. Here again in 2012, similar concerns are once again at the surface.
Why revisit this topic again? Simply because if actions against Iran trigger a shutdown of the Strait of Hormuz, through which 40% of the world's daily sea-borne oil passes, oil prices will spike, the world's teetering economy will slump, and the arrival of the next financial emergency will be hastened. Even if the strait remains open but Iran is blocked from being an oil exporter for a period of time, it bears mentioning that Iran is the third largest exporter of oil in the world after Saudi Arabia and Russia.

White House and State Department are in No Position
to Issue Credible Denials Regarding Spying Charges
An American Spy in Iran?
by DAVE LINDORFF - CounterPunch.org
I wouldn’t want to be Amir Mirzaei Hekmati, the 28-year-old former US Marine just recently sentenced to death by a court in Iran after being convicted of being an American spy.
Hekmati, who was born in Arizona to Iranian exile parents, and who grew up in Michigan, is being defended by President Obama, whose White House spokesman Tommy Vietor, declared, "Allegations that Mr. Hekmati either worked for, or was sent to Iran by the CIA are false." The White House, not content with that denial, went on to trash the Iranian government and legal system, with Vietor adding, "The Iranian regime has a history of falsely accusing people of being spies, of eliciting forced confessions, and of holding innocent Americans for political reasons."

Iran car explosion kills nuclear scientist in Tehran
By Frank Gardner - BBC.co.uk
A university lecturer and nuclear scientist has been killed in a car explosion in north Tehran.
Mostafa Ahmadi-Roshan, an academic who also worked at the Natanz uranium enrichment facility, and the driver of the car were killed in the attack.
The blast happened after a motorcyclist stuck an apparent bomb to the car.
Several Iranian nuclear scientists have been assassinated in recent years, with Iran blaming Israel and the US. Both countries deny the accusations.

Iran blames Israel for killing nuclear scientist
Bomb kills Iran nuclear scientist as crisis mounts
By Ramin Mostafavi and Parisa Hafezi
(Reuters) - An Iranian nuclear scientist was blown up in his car by a motorbike hitman on Wednesday, prompting Tehran to blame Israeli and U.S. agents but insist the killing would not derail a nuclear program that has raised fears of war and threatened world oil supplies.
The fifth daylight attack on technical experts in two years, the magnetic bomb delivered a targeted blast to the door of 32-year-old Mostafa Ahmadi-Roshan's silver sedan as he was driven down a busy street near a Tehran university during the morning rush hour. The chemical engineer's driver also died, Iranian media said, and a passer-by was slightly hurt.

Iran and the undeclared campaign
By Frank Gardner - BBC.co.uk
The assassination on Wednesday of another Iranian nuclear scientist may now prompt Iran to try to respond in kind.
The murder in Tehran of Mostafa Ahmadi-Roshan is the fourth such attack on Iran's scientists in just two years.
It comes on top of a sophisticated cyber sabotage programme and two mysterious explosions at Iranian military bases, one of which in November killed the general known as 'the godfather' of Iran's ballistic missile programme.

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Wednesday 01.11.2012

Why the Wealthy Own Gold
by Mark Motive - LewRockwell.com
The global economy is in turmoil. Europe is on the verge of collapse, probably taking the US down with it. As the euro-crisis worsens, we march ever closer to outright monetization of European debt by the ECB and, covertly, by the Federal Reserve. The developed world is perilously close to a monetary deluge that could make the Weimar Republic's hyperinflation look like amateur hour.
Yet, I still talk to Wall Street analysts who clearly misunderstand gold's place in a portfolio. Meanwhile, many people who are part of the world's wealthy class are hoarding gold. What do they know that others don't?

Gold bouncing on value buying, short covering
LONDON (Commodity Online): Gold futures have rebounded from recent lows on value buying and short covering. There is still some market uncertainty, such as whether this is a corrective bounce, but nevertheless sentiment is more positive, said optionsXpess in a briefing.
"Gold has found some strength in improved investor confidence in the eurozone, as well as stronger U.S. equity prices. What has stopped some metal bulls from entering the market is that prices are dependent on these outside markets, meaning that a pullback in equities could drag precious metals along with it in the near term," optionsXpess added.

Gold above 200-day average; technical picture improving
LONDON (Commodity Online): Gold’s technical-chart picture has improved as the Comex futures move higher, said George Gero, vice president and precious-metals strategist with RBC Capital Markets Global Futures.
Gold has been helped by a weaker U.S. dollar, with buy stops triggered. Gero also cites an absence of willing sellers.
"We are back above the 200-day moving average and, as expected, by holding the $1,600 area, we built a better technical picture," Gero said.

Why Has Gold Been Down?
By Jeff Clark - DailyReckoning.com
01/06/12 Stowe, Vermont – After all, in spite of some short-term fixes, there remains no real resolution to the sovereign debt issues in many European countries. We’re certainly not spending less money in the US, and now we’re bailing out Europe via currency swaps with the European Central Bank. Shouldn’t gold be rising?
Yes, but nothing happens in a vacuum. There are some simple explanations as to why gold remains in a funk.
1. The MF Global bankruptcy, the seventh-largest in US history, forced a high degree of liquidation of commodities futures contracts, including gold. Many institutional investors had to sell whether they wanted to or not. This is similar to why big declines in the stock market can force funds and other large investors to sell some gold to raise cash for margin calls or meet redemption requests.

How Long Are Gold Corrections?
(Or: How Much Longer Is Gold 'On Sale'?)
Gold Will Make a New High on This Date
By Jeff Clark, BIG GOLD - CaseyResearch.com
Some investors are frustrated and a few are worried that gold seems stuck in a rut. This stall in price has happened before, of course, but since 2001 it's always eventually powered to a new high. Unless one thinks the gold bull market is over, it's natural to wonder how long might we have to wait before seeing another new high.
Absent some sort of global shock that sparks another rush into gold (easily possible in today's climate), I think the answer may lie in examining the size and length of past corrections and how long it took gold to reach new highs afterward.

Now silver is your ticket to wealth
By Gavin Mann - CommodityOnline.com
Unless vast reserves of Silver are discovered in the next few years, it is estimated that this precious metal could have less than 20 years supply before it is all gone. this shortage of supply and strong demand within industry is a recipe to one day elevating Silver to being the most valuable precious metal available, and priced even higher than Gold.
Silver is now one of the most sought after, and also now the rarest of the precious metals on the earth today. With approximately 15 years supply of Silver still left in the ground, and with over 1500+ Industrial applications, Silver is now in the spotlight of astute investors to grow, and also protect their Wealth Portfolios for the foreseeable future.

When the Bond Buying Stops, the Game Is Over
Detlev Schlichter - SilverBearCafe.com
I would not touch bonds with a barge pole, especially government bonds. After 40 years of unending fiat money expansion, the world suffers from excess levels of debt. A lot of this debt will never be repaid. My expectation is that the market will increasingly question the ability and the willingness of most states – and that, crucially, includes the big states – to control their spending and to shed their addiction to debt financing.
What happens to high-spending credit-dependent states when the market loses confidence in them has been evident in cases such as Ireland, Portugal and Greece? Among the big financial calamities of 2011 were notably government bond markets. Perversely, some of the big winners of 2011 were also government bond markets.

How To Prepare For The Difficult Years Ahead
TheEconomicCollapseBlog.com
How should people prepare for the difficult years that are coming? I get asked about that a lot. Once people really examine the facts, it is not too hard to convince them that an economic collapse is coming. But once they accept that reality, most of them want to know what they can do to prepare themselves and their families for the hard times that are ahead. Well, the truth is that it does not have to be complicated. Many of the things discussed throughout this article are things that most of us should be doing anyway. Now is not the time to be splurging on luxuries or expensive vacations. Now is not the time to be going into large amounts of debt. Instead, we all need to get back to the basics and we all need to do what we can to become more independent of the system. Just remember what happened back in 2008. Millions of Americans lost their jobs and millions of Americans lost their homes. Now experts all over the globe are warning that another great financial crisis that could be just as bad as 2008 (or even worse) is coming. Those that don't take the time to prepare this time are not going to have any excuse.

Hedge funds lock horns with IMF on Greek debt
By Tommy Wilkes and Sarah White
(Reuters) - Hedge funds are taking on the powerful International Monetary Fund over its plan to slash Greece's towering debt burden as time runs out on the talks that could sway the future of Europe's single currency.
The funds have built up such a powerful positions in Greek bonds that they could derail Europe's tactic of getting banks and other bondholders to share the burden of reducing the country's debt on a voluntary basis.

Global Imbalances and Domestic Inequality
Kemal Derviş - Project-Syndicate.org
WASHINGTON, DC – Despite years of official talk about addressing global current-account imbalances, they remained one of the world’s main economic concerns in 2011. Global imbalances were, to be sure, smaller overall than before the crisis, but they did not disappear. Now some are increasing again, alongside inequality in many countries. That link is no accident.
One often hears calls for global rebalancing whereby emerging-market countries with payments surpluses – China is the most-often mentioned – would stimulate internal demand, so that advanced countries (the largest being the United States) could reduce their deficits and public debts with less threat to their economies’ recovery. The net foreign demand created by a reduction in balance-of-payments surpluses abroad would partly offset the weakening of public demand in the US and other high-debt countries as they tightened fiscal policy.

Federal Reserve pays $77 billion to Treasury
By Annalyn Censky @CNNMoney
NEW YORK (CNNMoney) -- Ben Bernanke is about to hand Timothy Geithner a very large check.
The Federal Reserve announced Tuesday that it plans to pay the Treasury $76.9 billion, the bulk of the Fed's 2011 income after accounting for its own operating expenses.
Each year after paying its own bills, the central bank hands over all its remaining earnings to the Treasury, as per Fed policy. Most of the money is derived from interest earned on holdings like Treasury bonds and other debt.

Geithner’s Ploy:
Saving U.S. Banks at Taxpayer Expense, Once Again
By Michael Hudson - NewEconomicPerspectives.blogspot.com
U.S. and foreign stock markets continue to zigzag wildly in response to expectations about whether the euro can survive, in the face of populations suffering under neoliberal austerity policies being imposed on Ireland, Greece, Spain, Italy, etc. Here’s the story that I’m being told by Europeans regarding the recent turmoil in Greece and other European debtor and budget-deficit economies. (The details are not out, as the negotiations have been handled in utter secrecy. So what follows is a reconstruction.)

Geithner Presses China on Currency, Iran
By Ian Katz and Cheyenne Hopkins - Bloomberg.com
U.S. Treasury Secretary Timothy F. Geithner will urge Asia’s two biggest economies to cut Iranian oil imports and seek to narrow differences with China on trade and currency disputes on a visit to Beijing and Tokyo this week.
Geithner arrived in Beijing yesterday and met Chinese Vice PremierWang Qishan. He will hold talks with Premier Wen Jiabao, Vice President Xi Jinping and Vice Premier Li Keqiang today. In Japan, he is due to meet with Prime Minister Yoshihiko Noda and Finance MinisterJun Azumi tomorrow.

How Central Bankers Attempt to "Cure" Insolvency
By Eric Fry - DailyReckoning.com
01/06/12 Laguna Beach, California – Like trying to patch a nuclear reactor with scotch tape and chewing gum, the central banks of the world’s leading economies are trying to Spackle over cracks in the global monetary system with a variety of desperate tactics and measures.
Unfortunately, hiding the cracks does nothing to strengthen the underlying infrastructure. To the contrary, hiding the cracks dupes individuals into believing all is well, even as the monetary system is crumbling around them.

MF Global Holdings trustee urges creditors' priority
(Reuters) - The bankruptcy trustee for MF Global Holdings Ltd (MFGLQ.PK) said that entity's creditors deserve to rank higher in the pecking order for repayment on some claims than customers of its brokerage unit.
In a filing late Monday with the bankruptcy court in Manhattan, trustee Louis Freeh said the holding company has "substantial intercompany claims" against the brokerage unit MF Global Inc, stemming from intercompany loans it made to that unit.

How JP Morgan And George Soros
Ended Up With MF Global Customer Money
ClearingAndSettlement.com
In recent testimony before a Congressional committee, MF Global’s former chief Jon Corzine as well as other MF Global executives said repeatedly the didn’t know where the failed brokerage firm’s $1.2 billion of missing client money was. In fact, MF Global executives knew exactly what happened to the money, as do the regulators who oversaw the firm’s bankruptcy. The so-called segregated customer funds were repeatedly, and legally (through re-hypothication), used as collateral for MF Global loans for 100:1 leveraged bets on European sovereign debt.
A substantial portion of MF Global’s commodity clients cleared their transactions through the Chicago Mercantile Exchange and Comex, owned by CME Group (ticker: CME). The question now looming over CME’s stock is whether the company will be liable for customer losses, as the Commodity Customer Coalition, a group that says it represents some 8,000 investors—including many hedge funds–with exposure to MF Global are not going down without a fight.

Greenspan’s Laissez Fairy Tale
By William K. Black - NewEconomicPerspectives.blogspot.com
We continue to witness remarkable developments in the intersection of the related fields of economics, finance, ethics, law, and regulation. Each of these five fields ignores a sixth related field – white-collar criminology. The six fields share a renewed interest in trust. The key questions are why we trust (some) others, when that trust is well-placed, and when that trust is harmful. Only white-collar criminologists study and write extensively about the last question. The primary answer that the five fields give to the first question is reputation. The five fields almost invariably see reputation as positive and singular. This is dangerously naïve. Criminals often find it desirable to develop multiple, complex reputations and the best way for many CEOs to develop a sterling reputation is to lead a control fraud.

Keiser Report: Hollywood Cons Congress (E234)

Fraud and Folly:
The Untold Story of General Electric's Subprime Debacle
The industrial giant jumped into the subprime business in 2004, lending blue-chip respectability to the market for risky home loans.
The Center for Public Integrity / By Michael Hudson - Alternet.org
For General Electric Co., hawking subprime mortgages was a long way from making light bulbs and jet engines.
That didn't stop the industrial giant from jumping into the subprime business in 2004, lending blue-chip respectability to the market for risky home loans by paying roughly half a billion dollars to buy California-based WMC Mortgage Corp.
What GE got in the bargain, former WMC employees say, was a place where erstwhile shoe salesmen, ex-strippers and even a former porn actress could sign on as sales reps and make big money pushing home loans. WMC's top salespeople earned a million dollars a year or more and lived fast, swigging $1,000 bottles of Cristal and wheeling around in $100,000 Ferraris and Bentleys.

Gov. Brown's cap-and-trade spending plan angers businesses
He aims to spend $1 billion from the auction of greenhouse gas emission credits to help shrink the budget shortfall. Industry groups call that a back-door tax hike.
By Marc Lifsher, Los Angeles Times
Reporting from Sacramento—
Gov. Jerry Brown has found a new pot of money to help him fill a $9-billion hole in his proposed budget: $1 billion from auctioning credits to allow California companies to emit greenhouse gases.
But business groups are already denouncing Brown's plan as a back-door tax increase that they intend to challenge in court if the proposal is approved as part of the state budget for the fiscal year that begins July 1.

Kodak and the Post Office
By Thomas Sowell - Townhall.com
The news that Eastman Kodak is preparing to file for bankruptcy, after being the leading photographic company in the world for more than a hundred years, truly marks the end of an era.
The skills required to use the cameras and chemicals required by the photography of the mid-19th century were far beyond those of most people -- until a man named George Eastman created a company called Kodak, which made cameras that ordinary people could use.

MetLife says exits forward mortgage business
(Reuters) - MetLife will shut down its mortgage operations, the largest U.S. life insurer said on Tuesday, giving up on the unit three months after it said it would seek a buyer.
MetLife has been trying to shed assets like its bank and mortgage operations in order to reduce regulatory scrutiny and focus its operations on insurance and annuities. Last year the Federal Reserve blocked the company from raising its dividend, and most analysts expect it will soon face additional regulatory oversight as a "systemically important" financial firm.

Turning foreclosures into rentals
By Tami Luhby @CNNMoney
NEW YORK (CNNMoney) -- Federal officials hope to launch a pilot program in early 2012 to convert government-owned foreclosures into rental properties.
The program, which was cited by Federal Reserve Chairman Ben Bernanke last week as one way to address the housing crisis, would sell foreclosed homes now owned by Fannie Mae (FNMA, Fortune 500) and Freddie Mac (FMCC, Fortune 500) to investors in bulk. The properties would then be converted into rentals.

Gerald Celente - Coast to Coast AM - 05 January 2012

Hiring rose in November,
though employers posted fewer jobs,
pointing to uneven job gains
AP - WashingtonPost.com
WASHINGTON — U.S. employers stepped up their hiring in November but pulled back slightly on the number of jobs they advertised.
The mostly favorable report shows companies are gaining more confidence in the economy and filling more of their open positions. It follows other encouraging data on hiring that suggest 2012 may be a better year for job growth.
Employers filled almost 4.15 million jobs in November, a 3 percent increase from the previous month, the Labor Department said Tuesday. It also nearly matched September’s hiring level, which was the highest since May 2010.

Credit Card Firms:
They Don't Just Steal From Cardholders
By Matt Taibbi - RollingStone.com
Great story out this morning by Bloomberg reporter Thom Weidlich, detailing yet another devious and dirty scheme in the consumer credit industry.
The story outlines the misfortunes of a successful Park City, Utah restaurant called Cisero's that is best known for serving the movie stars and film glitterati attending the nearby Sundance film festival. The restaurant is engaged in a legal battle with its bank, but the larger struggle is between the restaurant and major credit cards like Visa and MasterCard.

Dumb As A Rock:
You Will Be Absolutely Amazed
At The Things That U.S. High School Students Do Not Know
EndOfTheAmericanDream.com
Are we raising the stupidest generation in American history? The statistics that you are about to read below are incredibly shocking. They indicate that U.S. high school students are basically as dumb as a rock. As you read the rest of this article, you will be absolutely amazed at the things that U.S. high school students do not know. At this point, it is really hard to argue that the U.S. education system is a success. Our children are spoiled and lazy, our schools do not challenge them and students in Europe and in Asia routinely outperform our students very badly on standardized tests. In particular, schools in America do an incredibly poor job of teaching our students subjects such as history, economics and geography that are necessary for understanding the things that are taking place in our world today. For example, according to a survey conducted by the National Geographic Society, only 37 percent of Americans between the ages of 18 and 24 can find Iraq on a map of the world. According to that same survey, 50 percent of Americans between the ages of 18 and 24 can't even find the state of New York on a map. If our students cannot even find Iraq and New York on a map, what hope is there that they will be able to think critically about the important world events of our day?

Park City Eatery Balks
at Credit Card Fines in Rare Court Fight
By Thom Weidlich - Bloomberg.com
Stephen and Cissy McComb say they managed their Italian eatery in Park City, Utah, for more than two decades without running afoul of security rules of Visa Inc. (V) and MasterCard Inc. (MA) -- until they were accused of mishandling data and opening the door to $1.26 million in fraud.
The McCombs, who opened Cisero’s in 1985, are now in a legal fight with the bank that processed their credit charges and, indirectly, with what they say are card networks that change rules without notice, impose unfair one-sided contracts and allow the taking of money from merchants’ accounts with no proof of fault.

U.S. Supreme Court rules
credit repair firms can force arbitration
Justices rule that credit repair firms can block lawsuits if customers' agreements carry arbitration clauses. The ruling is the latest in a string to back such clauses over consumers' right to sue.
By Jim Puzzanghera, Los Angeles Times
Reporting from Washington— A 1996 law sought to protect struggling consumers from businesses promising to improve their credit rating, and specifically gave customers the right to sue any firm in violation.
But the U.S. Supreme Court ruled Tuesday that credit repair companies could block such lawsuits and instead force disgruntled customers into binding arbitration if they had agreed to such a provision in the fine print of their agreements.

Monsanto’s GMO Corn Approved
Despite 45,000 Public Comments in Opposition
By Mike Barrett - NaturalSociety.com
As previously reported, while people were de-stressing and enjoying their much needed time off during the holidays, the United States Department of Agriculture announced its approval of Monsanto’s ‘drought tolerant’ genetically engineered corn. The decision to give the green light to Monsanto regarding their GE corn didn’t seem too difficult for the Obama Administration, despite receiving nearly45,000 public comments voicing opposition and only 23 comments in favor since comments opened. Prepare to see this new GE corn unleashed into the environment as well as the American food supply.

Romney Wins New Hampshire Republican Primary
By Catherine Dodge - Bloomberg.com
Mitt Romney won the New Hampshire Republican presidential primary election, the Associated Press projected, giving the former governor of Massachusetts victories in the first two nomination contests.
Romney had 36 percent of the vote, with 18 percent of precincts reporting, according to the AP. He was followed by Ron Paul, who had 25 percent and was projected to finish in that spot by NBC News and CNN.

Ron Paul Says It's Two-Man Race Now
By Catherine Hollander - NationalJournal.com
After an impressive second-place finish in the New Hampshire GOP presidential primary, Rep. Ron Paul of Texas said it's a two-man race now.
"We’re next in line to [Romney]. I would say we’re the only ones really in the race with him," Paul told CNN Tuesday night.
He told CNN had had “no plans” for a third-party candidacy at this time.
"The people's attitudes have changed and my message got out. The country is in worse shape," he said. "I've talked about financial problems in this country for 30 years. They realized some of the things I said came about. ... I was the only one that offered cutting spending. I think it is a very popular message and the interest will continue to grow."

Veterans, Active Duty Soldiers
To March On White House For Ron Paul
Media ignores Paul’s service record and fact he has most donations from military
By Steve Watson - Infowars.com
In a forthcoming event dubbed "Ron Paul Is The Choice Of The Troops", thousands of veterans and active duty military personnel are expected to march on the White House in support of the Texas Congressman’s presidential bid.
The event, to be held on President’s Day, February 20th, is being organized by activist group Veterans for Ron Paul 2012, co-founded by Adam Kokesh, Iraq war veteran turned activist and talk show host.

Conservative activists
scrambling for a strategy to block Romney
By Peter Wallsten and Karen Tumulty - WashingtonPost.com
As Mitt Romney seeks to build on his wins in Iowa and New Hampshire, a near-panic has taken hold among some core conservative activists who are now scrambling to devise a strategy to deny him the Republican presidential nomination.
Many of these activists see South Carolina’s primary on Jan. 21 as their last best hope of stopping Romney by consolidating in a united front against him, but many acknowledge that they have yet to figure out which of the remaining conservative rivals to rally behind and which should get out.

10 Ways Right-Wing Christian Groups
Will Likely Shove Religion Down Your Throat This Year
A surging religious right means daunting challenges for keeping Church and State separate.
Church & State Magazine / By Simon Brown - Alternet.org
The following piece comes from Church and State Magazine, published by Americans United for Separation of Church and State.
You don’t have to look far or wide to see signs that the Religious Right was resurgent in 2011.
From the halls of Congress, where the U.S. House of Representatives overwhelmingly urged public schools to post "In God We Trust" displays in classrooms, to the Values Voter Summit in Washington, D.C., that was attended by 3,000 fundamentalist Christian activists, the Religious Right’s influence loomed large.

Oklahoma Sharia law ban 'unconstitutional', court rules
BBC.co.uk
The US state of Oklahoma has been stopped from introducing a amendment to its constitution, stopping courts from considering Islamic law in judgements.
A federal court of appeals upheld a district judge's decision to block the implementation of the amendment.
The ban on Islamic law was approved by 70% of voters in a referendum in 2010.
But it was challenged by a Muslim community leader who said the amendment violated his constitutional right to freedom of religion.

NDAA Is A Hoax: You Can't Legalize Tyranny

Doctors Urge Fracking Halt Over Health Concerns
By Anthony Gucciardi - NaturalSociety.com
Doctors are warning United States government officials and gas producers about the dangers of hydraulic fracking, the controversial act of pumping water and chemicals underground in order to facilitate the flow of oil or gas. As previously admitted by the EPA, reports have revealed that fracking is leading to groundwater pollution that could be endangering your health.
Jerome Paulson, a pediatrician at George Washington University School of Medicine in Washington, is calling upon gas producers who are heavily involved in fracking to finance studies examining the safety of the process. Until then, he is calling for hydraulic fracking to come to a freeze. While there are many corporations involved with fracking, top independent producers include Chesapeake Energy Corp. and Devon Energy Corp., both of Oklahoma City, and Encana Corp. of Calgary.

Catholic Church no longer swears by truth of the Bible
By Ruth Gledhill, Religion Correspondent
THE hierarchy of the Roman Catholic Church has published a teaching document instructing the faithful that some parts of the Bible are not actually true.
The Catholic bishops of England, Wales and Scotland are warning their five million worshippers, as well as any others drawn to the study of scripture, that they should not expect “total accuracy” from the Bible.
“We should not expect to find in Scripture full scientific accuracy or complete historical precision,” they say in The Gift of Scripture.

Asia’s New Tripartite Entente
Brahma Chellaney - Project-Syndicate.org
NEW DELHI – The launch of trilateral strategic consultations among the United States, India, and Japan, and their decision to hold joint naval exercises this year, signals efforts to form an entente among the Asia-Pacific region’s three leading democracies. These efforts – in the world’s most economically dynamic region, where the specter of a power imbalance looms large – also have been underscored by the Obama administration’s new strategic guidance for the Pentagon. The new strategy calls for "rebalancing toward the Asia-Pacific" and support of India as a "regional economic anchor and provider of security in the broader Indian Ocean region."

Syria's Assad vows "iron fist", mocks Arab League
By Dominic Evans
(Reuters) - Syrian President Bashar al-Assad vowed on Tuesday to strike "terrorists" with an iron fist and derided Arab League efforts to halt violence in a 10-month-old revolt against his rule.
The president's 100-minute speech, his first public address since June, contained some promises of reform, but no sweeping concessions that might placate an opposition now determined to end more than four decades of domination by the Assad family.

Ahmadinejad begins five-day visit to Latin America
by Renata Giraldi - Pravda.ru
The president of Iran, Mahmoud Ahmadinejad, left Tehran on Sunday (8th), the capital, for Latin America, where he will be for almost a week. He first landed in Caracas (Venezuela), then goes to Managua (Nicaragua), Havana (Cuba) and Quito (Ecuador). The Iranian President travels with an entourage of ministers and businessmen from the country.
According to aides, Ahmadinejad seeks to build relationships and discuss economic and political issues. The President defines the relations between Iran and Latin America simply: "Relations between Iran and the Latin American countries are friendly and are in full development."

US ships 'in second rescue of Iranians in Gulf'
BBC.co.uk
A US ship has picked up Iranians in trouble at sea, in the second such rescue in less than a week, the Pentagon has said.
US Coast Guard cutter Monomoy rescued six Iranian mariners after their vessel broke down in the Gulf.
One of the six had suffered burns and is receiving treatment, Pentagon spokesman George Little told reporters.
The US Navy rescued 13 Iranian fishermen last Thursday after they were captured by Somali pirates.
Both incidents come at a time of heightened tensions between Washington and Tehran.

Is a US-Iran maritime clash inevitable?
By Jonathan Marcus, BBC diplomatic correspondent - BBC.co.uk
In 1988, US warships clashed with Iranian forces in the Gulf. As a war of words now escalates, is there a danger that history will repeat itself?
Operation Praying Mantis is today little more than a footnote in US naval history.
But the clash between US warships and aircraft and Iranian forces in the Gulf in April 1988 could be a foretaste of the potentially larger naval clash that may be threatening as tensions in the region grow.

EU ministers plan Iran oil embargo, IAEA team to visit
By Parisa Hafezi and Fredrik Dahl
(Reuters) - Europe and Japan moved ahead Tuesday in planning for punitive cuts in oil imports from Iran, where a senior official dismissed Western anger at news Tehran is enriching uranium deep underground as cover for ulterior motives.
A day after Iran confirmed the start of enrichment at a mountain bunker near the holy city of Qom - and sentenced an American to death for spying - the European Union brought forward a ministerial meeting that is likely to match new U.S. measures to hamper Iran's oil exports.

Russia 'worried' over Iran's nuclear ambitions
Russia has voiced rare "worry" over Iran's nuclear ambitions as the European Union brought forward a meeting of foreign ministers to decide whether to impose a potentially crippling oil embargo.
By David Blair - Telegraph.co.uk
The Kremlin, which generally opposes Western attempts to tighten United Nations sanctions, criticised Iran for starting to enrich uranium at up to 20 per cent purity inside a previously secret plant.
This facility, located at Fordow near the city of Qom, is buried beneath a mountainside and could be invulnerable to military attack.

Iran's Mahmoud Ahmadinejad
and Venezuela's Hugo Chavez
taunt US over 'big atomic bomb'
Iran's President Mahmoud Ahmadinejad and Venezuela's Hugo Chavez joked about having "a big atomic bomb" and mocked US disapproval during a meeting between the two allies in Caracas.
By Barney Henderson - Telegraph.co.uk
Despite their geographical distance, the two countries have forged increasingly close ties, a lot of which is down to their shared anti-Americanism, although concrete projects have often lagged behind the rhetoric.
"One of the targets that Yankee imperialism has in its sights is Iran, which is why we are showing our solidarity," Chavez said during a joint press conference. "That hill will open up and a big atomic bomb will come out," he said of a hill next to his Miraflores Palace.

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Tuesday 01.10.2012

Physical silver hits a record 30% premium over spot
By Tyler Durden - CommodityOnline.com
One of the main reasons why we have been not so focused on paper representations of real currencies (i.e., Gold and silver) is that ever since the MF Global debacle, in which it became all too clear that if physical gold can be "hypothecated" via conflicting ownership, then there is no way that paper versions of precious metals are viable and indeed credible. After all, the only real owner at the end of the day is the certificate holder, which as we have explained before, is none other than DTCC's Cede & Co. Good luck collecting when the daisy chain of counterparties starts falling.

Will silver prices be boosted by Investments in China?
Precious metals have seen a resurgence in recent years as investors search for ways to secure their wealth. Investments that are heavily reliant on the dollar are riskier than ever. Precious metals such as silver, on the other hand, provide hedges against economic uncertainty. For this reason, Silverhas become a mainstream investment vehicle.
Countries such as China are purchasing silver in record quantities. China is encouraging its citizens to do the same in order to secure the country’s financial holdings and to become less reliant on weakening paper currencies. As a result, the price of silver is expected to continue its upward trend.

Gold and silver: When and why to buy
By Barry Taylor - CommodityOnline.com
In times of economic and political uncertainty traders are often advised to invest in Gold and Silver - the Precious Metals. But is this the right thing to do? Historically, investing in gold, silver or Platinum was seen as a sure-fire way of protecting your wealth against the fluctuations in the economy during periods of political unrest or economic down turn. Gold still holds a special place in people's hearts as a means of 'storing' wealth during an economic crisis.

Goldman: Base metals predection 2012
LONDON (Commodity Online): Goldman Sachs sees value in base metals at current prices. "Concerns about European sovereign-debt problems and slowing economic growth have kept base-metal prices under pressure," Goldman added.

Gold eases on technical selling
By Frank Tang and Jan Harvey
(Reuters) - Gold eased on
Monday, breaking ranks with equities and the euro which it had tracked closely for two months, as bullion investors focused on technical resistance and kept fretting about the euro zone debt crisis.
Gold rose in early trade, then surrendered those gains as Germany andFrance warned Greece it will get no more bailout funds until it agrees with creditor banks on a bond swap.

Soros Said to Buy Gold Again Late Last Year
By Forrest Jones - MoneyNews.com
Legendary financier George Soros returned to buying gold in late 2011 after selling it earlier, and is due to reap the benefits later this year when Fed policies will likely weaken the dollar and send the precious metal climbing, Emerging Money reports.
In the first quarter of 2011, Soros Fund Management sold almost all its shares in the SPDR Gold Trust and the iShares Gold Trust exchange-traded funds, Bloomberg reports, citing SEC data.

Netherlands Urged to Repatriate Gold Reserves
By Esther Tanquintic-Misa - IBTimes.com
Notwithstanding how good current relations may be between the Netherlands and the U.S., once global investor confidence waned on the American dollar, the Dutch could still lose the gold reserves it placed in full trust in various strategic vaults in the US. Call it perhaps survivor's instinct.
Gold experts in the Netherlands advised the federal government it should start facilitating the repatriation of its gold reserves from the U.S. , as well as from Great Britain and Canada, after the Dutch central bank (DNB) confirmed a Dutch newspaper report by the de Volkskrant that revealed much of the country's reserves of the yellow metal are not within the country.

Leading Indicators and the Risk of a Blindside Recession
BY JOHN HUSSMAN PHD - FinancialSense.com
Over the past few weeks, investors used to setting their economic expectations based on a "stream of anecdotes" approach have seen their economic views evolve roughly as follows:

"After a brief 'scare' during the third quarter, economic reports have come in better than expectations for weeks - a sign that the economy is on a gradual but predictable growth path;Purchasing managers reports out of China and Europe have firmed, and the U.S. Purchasing Managers Indices have advanced, albeit in the low 50's, but confirming a favorable positive trend, and indicating that the U.S. is strong enough to pull the global economy back to a growth path, or at least sidestep any downturn; New unemployment claims have trended gradually lower, and combined with a surprisingly robust December payroll gain of 200,000 jobs, provides a convincing signal that job growth is on track to improve further."

U.S. Economy’s Challenges
Greater This Year Than Last, Gluskin Sheff Says
By Bob Willis and Betty Liu - Bloomberg.com
David Rosenberg, chief economist and strategist at Gluskin Sheff & Associates Inc., said the U.S. economy faces more challenges in 2012 than last year, while he backed away from his prediction the nation was facing a near- certain recession.
"Certainly, we’re not in a recession right now," Rosenberg said in an interview on Bloomberg Television’s "In the Loop” with Betty Liu. Nonetheless, he said, "I still believe the economy is still fragile and this recovery is still quite spotty."

Debt, Trade Imbalances, and Currency Wars
BY MICHAEL PETTIS - FinancialSense.com
Europe’s underlying problem is not budget deficits or even unsustainable debt. These are mainly symptoms. The real problem with Europe is the huge divergence in costs between the core and the periphery – in the past decade costs between Germany and some of the peripheral countries have diverged by anywhere from 20% to 40%. This divergence has made the latter uncompetitive and has resulted in the massive trade imbalances within Europe.

Iran, Russia Replace Dollar
with National Currencies in Trade Exchanges
TEHRAN (FNA)- Iran and Russia have replaced US Dollar with their own currencies in their trade ties, a senior Iranian diplomat announced on Saturday.
FarsNews.com
Speaking to FNA, Tehran's Ambassador to Moscow Seyed Reza Sajjadi said that the proposal for replacing US Dollar with Ruble and Rial was raised by Russian President Dmitry Medvedev in a meeting with his Iranian counterpart Mahmoud Ahmadinejad in Astana on the sidelines of the Shanghai Cooperation Organization (SCO) meeting.
"Since then, we have acted on this basis and a part of our interactions is done in Ruble now," Sajjadi stated, adding that many Iranian traders are using Ruble for their trade deals.
"There is a similar interest in the Russian side," the envoy stated, adding that that Moscow is against unilateral sanctions on Iran outside the UN Security Council, specially the recent sanctions against Iran's Central Bank (CBI).

US Debt Is Now Equal to Economy
By Richard Wolf, USA Today - CNBC.com
The soaring national debt has reached a symbolic tipping point: It's now as big as the entire U.S. economy.
The amount of money the federal government owes to its creditors, combined with IOUs to government retirement and other programs, now tops $15.23 trillion.
That's roughly equal to the value of all goods and services the U.S. economy produces in one year: $15.17 trillion as of September, the latest estimate. Private projections show the economy likely grew to about $15.3 trillion by December — a level the debt is likely to surpass this month.

Consumer credit surges by most since 2001
By Jason Lange
(Reuters) - Consumer credit surged 10 percent in November, its biggest jump in a decade in a positive signal for the economy as consumers tapped their credit cards and the government doled out more student loans.
Outstanding consumer credit increased to $20.37 billion during the month, the Federal Reserve said on Monday. That was the biggest gain since November 2001 and nearly three times the median forecast in a Reuters poll.

Why Bernanke has Failed, and Will Continue to Fail
BY CHARLES HUGH SMITH - FinancialSense.com
Ben Bernanke's zero-interest rate policy (ZIRP) and command-economy efforts to maintain mispricing of risk, debt and assets are destroying capital and capitalism. No wonder his policies have failed so miserably.
To understand why Federal Reserve Chairman Ben Bernanke's efforts to restart economic "growth" have failed so completely and miserably, we need to compare the present with the end of the Great Depression. There is a wealth of irony in the Chairman's supposed expertise on the Great Depression, as his policies have backfired on "fixing" the Great Recession.

Ponzi Planet
The Danger Debt Poses to the Western World
By Alexander Jung - Spiegel.de
Countries around the world, particularly in the West, are hopelessly in the red, with debt rising every day. Even worse, politicians seem paralyzed, unable -- or unwilling -- to do anything about it. It is a global disaster that threatens the immediate future. But there might be a way out.
When Carlo Ponzi, a dishwasher from Parma, Italy, immigrated to the United States in 1903, he had $2.50 in his pocket and a million-dollar dream in his head. He was able to fulfill that dream, at least temporarily.

Keiser Report: Spiral of debt towards the paranormal (E233)

Bill Gross on the "Paranormal" Market of 2012...
Markets in 2012
William H. Gross - Pimco.com

• The New Normal, previously believed to be bell-shaped and thin-tailed in its depiction of growth probability and financial market outcomes, appears to be morphing into a world of fat-tailed, almost bimodal outcomes.
• A new duality – credit and zero-bound interest rate risk – characterizes the financial markets of 2012, offering the fat left-tailed possibility of unforeseen policy delevering or the fat right-tailed possibility of central bank inflationary expansion.
• Until the outcome becomes clear, investors should consider ways to hedge their bets, including: maximizing durations, U.S. Treasury bonds that may potentially offer capital gains, long-term Treasury Inflation Protected Securities (TIPS), high quality corporates and senior bank debt, and select U.S. municipal bonds.

Forbes: Regulators and Trustees
Suppressing Details on MF Global
JESSE'S CAFÉ AMÉRICAIN
I seem to recall predicting this coverup when the MF Global scandal broke at the end of October.
Eventually the regulators and financiers will spin a story and it might stick together. But there is also a possibility that it may come unhinged, and the coverup, not the theft of funds itself, will bring down careers and institutions.
And the scandal is much wider than MF Global and their unfortunate customers. This is not the sort of thing that those in positions of stewardship might wish to see come uncorked in an uncontrolled manner.

Hostess may file for Chapter 11 again
(Reuters) - Hostess Brands Inc, a wholesale baker, is again preparing to file for Chapter 11 bankruptcy protection this week, The Wall Street Journal reported, citing people familiar with the matter.
This would be second court restructuring for Ripplewood Holdings-owned Hostess, which filed for bankruptcy almost two years ago and had emerged from it last September.
Irving, Texas-based Hostess has arranged for about $75 million in debtor-in-possession financing to keep it afloat during bankruptcy proceedings, the sources told the paper.

Kodak prepares for Chapter 11 filing
(Reuters) - Eastman Kodak (EK.N) is preparing a Chapter 11 bankruptcy protection filing in case it is unable to sell its digital patents to raise capital, The Wall Street Journal reported on Wednesday.
The once-iconic photographic film pioneer is in talks with potential lenders to secure about $1 billion in debtor-in possession financing to sustain Kodak through bankruptcy proceedings, the Journal reported, citing unidentified sources.

Unemployment Drop Masks Ongoing Decline
Greg Hunter’s USAWatchdog.com
Last Friday, the Bureau of Labor Statistics (BLS) said 200,000 new jobs were created which dropped the unemployment rate to 8.5%. Break out the party hats and champagne, we’ve finally hit bottom and are heading back up! That’s the way the mainstream media (MSM) reported it, and in a campaign year, President Obama took a victory lap. Reuter’s reported Obama said, "We’re making progress. We’re moving in the right direction. And one of the reasons for this is the tax cut for working Americans that we put in place last year. . . .When Congress returns they should extend the middle class tax cut for all of this year, to make sure we keep this recovery going."

As home prices fall, more borrowers walk away
By John W. Schoen - MSNBC.com
When David Martin and his wife bought their north Seattle condo five years ago, they figured they had plenty of time to downsize if they needed to before they retired.
Now, with the property worth roughly $60,000 less than the balance of their mortgage, Martin, 68, has been giving serious thought to just walking away, a process lenders call "strategic default."
"Guilt and morality are one side, and objective financial analysis are on the other side," Martin said. "They're coming to two opposite conclusions. I wonder how many other people are struggling with the same question."

Rights? In The New America You Don’t Get Any Rights!
EndOfTheAmericanDream.com
One of the unique things about the Constitution of the United States was that it guaranteed certain rights for its citizens. Those rights provided the foundation for an era of freedom and prosperity that was pretty much unprecedented in human history and dozens of other nations eventually copied many of the ideas contained in our Constitution and Bill of Rights because they worked so well. Of course our system never functioned perfectly, but when you compare it to what has gone on for most of human history, it truly was a bright light in a sea of oppression and totalitarianism. Unfortunately, our rights are now being systematically taken away from us. In America today, the politicians have convinced most of us that in order to keep us all "safe" we must give up many of our rights and move toward becoming a totalitarian police state. In the "new America", you don't get any rights. They tell us that giving people rights is too dangerous. Instead, you get some limited "privileges" which can be revoked at any time by the authorities. Sadly, most Americans have become so dumbed-down that they don't even realize what is happening.

Goldman sees massive upside risk in oil prices
By Eric Onstad
(Reuters) - Oil, gold and base metals are Goldman Sachs' top commodity picks this year, with big upside risk in oil due to tight fundamentals and a potential Iranian conflict, the investment bank said on Monday.
Price increases in Brent crude already in the first weeks of the year mean Goldman's end-year target is only 13 percent away, but it is the commodity with the greatest potential to break above its target, Head of Commodities Research Jeff Currie said.

Judge Napolitano - What if it's about them

Rights? In The New America You Don’t Get Any Rights!
EndOfTheAmericanDream.com
One of the unique things about the Constitution of the United States was that it guaranteed certain rights for its citizens. Those rights provided the foundation for an era of freedom and prosperity that was pretty much unprecedented in human history and dozens of other nations eventually copied many of the ideas contained in our Constitution and Bill of Rights because they worked so well. Of course our system never functioned perfectly, but when you compare it to what has gone on for most of human history, it truly was a bright light in a sea of oppression and totalitarianism. Unfortunately, our rights are now being systematically taken away from us. In America today, the politicians have convinced most of us that in order to keep us all "safe" we must give up many of our rights and move toward becoming a totalitarian police state. In the "new America", you don't get any rights. They tell us that giving people rights is too dangerous. Instead, you get some limited "privileges" which can be revoked at any time by the authorities. Sadly, most Americans have become so dumbed-down that they don't even realize what is happening.

Wisconsin Gov. Walker: Unions 'want me dead'
By Ben Wolfgang-The Washington Times
With a June recall election all but certain, Wisconsin Gov. Scott Walker says the debate is no longer just about collective-bargaining rights for state workers. Union leaders and others, he said, have made it personal.
"They want me dead. I don’t think that’s an exaggeration," Mr. Walker said in an exclusive interview with The Washington Times after a roundtable discussion Thursday at the American Enterprise Institute.

Messages mixed on unions, health care in Ohio vote
Signals unclear for 2012
By Andrea Billups-The Washington Times
Ohio Democrats and labor unions spent much of Wednesday claiming bragging rights over the rejection by voters of a GOP-backed bill curbing union power, but a second vote repudiating the core of President Obama’s health care law showed that things may not be so clear cut heading into 2012.
Midwestern Democrats said they hoped to build on the union vote - and a second special election in Iowa that kept control of the state Senate in party hands - as part of a full-court press next year across the region, while giving Mr. Obama a big boost in one of the nation’s foremost swing states.

Netflix users watch 2 billion hours of video in fourth quarter
Netflix ended an exceedingly difficult 2011 by announcing a big number. -- By Don Reisinger - CNet.com
The company said earlier today that during the fourth quarter of 2011, more than 2 billion hours of television shows and movies were streamed by users across 45 countries.
Unknown, however, is how that compares to prior quarters. "We haven't made that comparison but suffice it to say 2 billion hours is a big number and a high mark," a company spokesman said.
In October, Sandvine reported that Netflix accounted for nearly one-third of peak downstream traffic in the U.S., making it a bigger bandwidth user than basic HTTP (Web) traffic. In 2010, the company's streaming service accounted for less than 30 percent of all U.S. peak downstream traffic.

Geeks to Testify (Finally!)
About SOPA Blacklisting Implications
By David Kravets - Wired.com
Rep. Darrell Issa (R-California), a major opponent of the Stop Online Piracy Act, announced Monday he is bringing in the techies to hold a public hearing highlighting the online security implications of a proposed bill that would force changes to internet infrastructure to fight online copyright infringement.
The announcement came three weeks after a markup of SOPA in the House Judiciary Committee was abruptly postponed amid concerns over its blacklisting element, which lets the attorney general order changes to core internet infrastructure in order to stop copyright infringement.

SOPA Is a Symbol of the Movie Industry's Failure to Innovate
This controversial anti-piracy legislation is all about studios and other corporations making excuses for their technological backwardness and looking out for their short-term profit
By Steve Blank - TheAtlantic.com
This year the movie industry made $30 billion (1/3 in the U.S.) from box-office revenue. But the total movie industry revenue was $87 billion. Where did the other $57 billion come from? From sources that the studios at one time claimed would put them out of business: Pay-per view TV, cable and satellite channels, video rentals, DVD sales, online subscriptions and digital downloads.
The music and movie business has been consistently wrong in its claims that new platforms and channels would be the end of its businesses. In each case, the new technology produced a new market far larger than the impact it had on the existing market.

Copyright Lawyers Oppose SOPA …
And Say It Won’t Even Work
Submitted by George Washington - ZeroHedge.com
Top constitutional law expert Lawrence Tribe opposes SOPA, as do many other con law experts.
But some of the nation’s top copyright lawyers also oppose SOPA and PIPA, including:...
AND IT WON’T EVEN WORK
Many experts have said that SOPA and PIPA are not only draconian, but that they fail to address the root problem.
A former intellectual property law school professor points out:
[SOPA and PIPA] aim to curb online copyright piracy … but end up using a sledgehammer, when a fine scalpel is instead needed.

Ron Paul's Texas Straight Talk 1/9/12:
No More Playing Fast and Loose with the Constitution!

RON PAUL PRODUCTS
(Campaign Brochures recommended by Eric)

The North Korea-ification of Iran
How the Islamic Republic and its many antagonists perpetuate a stand-off that's bad for everyone and nobody wants
By Max Fisher - TheAtlantic.com
On a cool, clear day in the fall of 2010, about 200 people living on the quiet suburban island of Yeonpyeong, many of them families, fled for their lives. Yeonpyeong lies in the Yellow Sea in a small disputed region that both North and South Korea claim falls within their border. South Korea has long held the island, but on November 23, 2010, North Korea sent artillery shells raining onto its most densely populated areas without apparent warning or provocation. Only two people were killed, but more were wounded and South Korea's 50 million people had to once again confront the fear of a second Korean War.

Geithner Seeks China’s Support on Iran
By Ian Katz and Cheyenne Hopkins - Bloomberg.com
U.S. Treasury Secretary Timothy F. Geithner will urge Asia's two biggest economies to cut Iranian oil imports and seek to narrow differences with China on trade and currency disputes on a visit to Beijing and Tokyo this week.
Geithner arrives in Beijing today to meet with Chinese Vice PremierWang Qishan and will hold talks with Premier Wen Jiabao, Vice President Xi Jinping and Vice Premier Li Keqiang tomorrow. In Japan, he is due to meet with Prime Minister Yoshihiko Noda and Finance Minister Jun Azumi on Jan. 12.

Iran too close for U.S. comfort
Latin visit, American’s death fate push limits
By Guy Taylor-The Washington Times
Tensions between the United States and Iran reached new heights Monday, as Iran’s president met with Venezuela’s leader amid reports that Tehran has issued a death sentence on a U.S. citizen accused of spying for the CIA.
In addition, the United Nations’ nuclear-watchdog agency on Monday confirmed reports that Iran has begun enriching uranium in an underground, mountain-ringed facility that would be difficult to attack in an airstrike.

Will the Iran Sanctions Spark an International Oil Crisis?
Western governments are trying to stop Iran's nuclear program by cutting off its oil revenue. Will they tank the world economy in the process?
Jordan Weissmann - TheAtlantic.com
As if the global economy wasn't chaotic enough these days, the escalating conflict over Iran's nuclear ambitions is now threatening to wreak havoc on the world oil market. On December 31, President Obama signed into law the toughest American sanctions yet against Tehran, which aim to cut off the country's petroleum revenue by penalizing financial institutions that do business with the country's central bank. Days later, Europe's leaders agreed in principal to an embargo on Iranian crude.

IAEA Confirms Iran Has Started 20% Uranium Enrichment
Submitted by Tyler Durden - ZeroHedge.com
The geopolitical foreplay is getting ridiculous. At this point it is quite obvious that virtually everyone involved in the US-Israel-Iran hate triangle is just itching for someone else to pull the trigger. And the latest report out of the IAEA will only precipitate this. Who - remember the IAEA? The same IAEA which did not find nukes in Iraq in 2003 only to be overriden by Dick "WMD" Cheney to "justify" an invasion. As RIA reports: "The International Atomic Energy Agency officially confirmed that Iran has started enriching uranium to the 20-percent level, which can easily be turned into fissile warhead material. "The IAEA can confirm that Iran has started the production of uranium enriched up to 20 percent using IR-1 centrifuges in the Fordo Fuel Enrichment Plant," the agency said in a statement. However, IAEA Spokeswoman Gill Tudor said that all nuclear materials and operations in the Fordo facility are "under the Agency's containment and surveillance."" Naturally, that leaves the "use of uranium" variable quite subjective and in the hands of political manipulation. Which means at this point it is only a matter of days before the meme that Iran already has nuclear warheads becomes actively adopted by warmongers everywhere.

Iran condemns American to die
Iran sentences U.S.-Iranian man to death for spying
By Parisa Hafezi
(Reuters) - Iran's Revolutionary Court has sentenced an Iranian-American man to death for spying for the CIA, officials said on Monday, a move likely to aggravate U.S.-Iranian tensions already high because of Tehran's disputed nuclear program.
The United States denies that Amir Mirza Hekmati is a spy and has demanded his immediate release. The White House said it was trying to verify the report on his sentencing.

Amir Mirzaei Hekmati,
alleged U.S. spy, sentenced to death in Iran
By Thomas Erdbrink and Joby Warrick - WashingtonPost.com
TEHRAN — An Iranian court sentenced a Michigan man to death on espionage charges Monday, drawing an angry response from the Obama administration and driving up the temperature in an increasingly volatile feud between the two countries.
Amir Mirzaei Hekmati, a former U.S. Marine of Iranian descent, was handed a death sentence for a list of alleged crimes that included spying for the CIA, state media reported. U.S. officials said the charges were false and politically motivated, describing them as the latest in a series of provocations by Iran’s clerical rulers.

Iranian, Venezuelan leaders rebuff U.S., joke about bomb
By Andrew Cawthorne and Brian Ellsworth
(Reuters) - Iranian President Mahmoud Ahmadinejad and Venezuela's Hugo Chavez lavished each other with praise on Monday, mocked U.S. disapproval and joked about having an atomic bomb at their disposal.
"Despite those arrogant people who do not wish us to be together, we will unite forever," the Iranian president told Venezuela's socialist leader Chavez at the start of a visit to four left-leaning Latin American nations.

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Archived Page Link
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Monday 01.09.2012

Why Rising Debt Will Lead to $10,000 Gold
By: Nick Barisheff - MarketOracle.co.uk
Good afternoon, it's a pleasure to speak about gold at this Outlook for 2012.
Today, I'd like to focus on one important idea: the direct relationship between the rising price of gold and the rising levels of government debt that result in currency debasement. Since we measure investment performance in currencies a clear understanding of the outlook for currencies is critical.

Gold Bottom Targets Trend to $4000
There has been so much talk about gold and so little understanding of the reality behind the move in the price of the yellow metal over the last 90 plus days that I think it’s necessary to separate the wheat from the chaff. I want to discuss what gold has done, where it’s at now, and then end with where it’s going from here and postulate why it’s going to do what it will do.
Right now you need to understand that gold is beginning the twelfth year of major bull market; perhaps the most unprecedented bull market in our lifetime. Here’s a quick snapshot of what that bull market has looked like since the 1999 bottom and the 2001 retest of that bottom:

Gold, silver, platiniun, palladium
looks extremely bullish in 2012
CommodityOnline.com
GOLD High : $2100 Low : $1590 Average : $1765
Black swan events are by nature high-impact, hard to predict and beyond the realm of expectations. By that reckoning financial markets are awash with them and forecasting for Goldin this environment is treacherous. Never has forecasting been so difficult - gold's fortunes are primarily linked to those of the dollar and the Euro and by extension to decisions made by politicians.
Fundamentally gold remains a good bet - the market is supply constrained and demand in Asia remains robust. As such gold has a strong underpinning. However the 'economic premium' in the gold price may remain volatile, reflecting increased uncertainty and heightened anxiety during H1. On the negative side a firmer dollar (in election year) could provide a drag on runaway prices.

Exclusive Interview –
Ned Naylor-Leyland:
"The Chain of Custody
Behind Gold’s Price Setting Mechanism
Appears to be Breaking"
By Tekoa Da Silva - BullMarketThinking.com
I had the chance to speak with Ned Naylor-Leyland yesterday, Investment Director with Cheviot Asset Management, and adviser to an offshore precious metals fund. It was a spectacular interview, as Ned is one of the few truly free thinkers in the investment business today.
During the interview Ned shared his thoughts on the new PAGE(Pan Asia Gold Exchange) launch in 2012 & the great opportunities it will provide investors, the recent pullback in gold and silver, and what may end up taking gold to go much higher levels.
In regards to the impending PAGE launch Ned said, "The great thing about this new exchange in China and the philosphy behind it, is its harking back to the old days of gold where you pay cash and get your gold…they’re opening up a 1 to 1 fully allocated recieipts market in gold. If Jeff Christian is to be believed, there is 350 to 1 leverage[in the Western paper gold markets]. That will give you a 0.3% coverage interms of real metal behind your contract."

Rounding Errors In the Big Scheme of Things
JESSE'S CAFÉ AMÉRICAIN
The markets did a 'pop and flop' on the 'better than expected' payroll numbers. While the number did beat expectations, it was largely due to temporary hiring for Christmas delivery and sales that was not properly deseasonalized.
I did not write something about this, but I do wish to point out something new. The BLS has always rounded the headline number of course, but now they are starting to round the 'raw number' as shown in the first picture below. That I have never seen before.

Silver Confirms the Bullish Outlook for Precious Metals
By: Przemyslaw Radomski - MarketOracle.co.uk
The new year started off with a bang with precious metals out-shining the competition. Is this a harbinger of things to come? We think so and we are not alone. Forecasts for gold for 2012 include a price per ounce of $2,200 by Morgan Stanley, $2,050 by UBS, and $2,000 by Barclays.
The year 2011, for other than gold investors, has been a disappointment, more like a train wreck. Growth has been paltry, unemployment remained high, sovereign debt in the stratosphere. The U.S. political system has been dysfunctional unable to make easy decisions, never mind the hard ones. There was no housing rebound and the eurozone looked like it was a house of cards. But look on the bright side. Despite a prophecy by Harold Camping, the world did not end on May 21.

'Reasons why silver to hit $50 in April 2012'
By Ted Butler - CommodityOnline.com
I believe the short squeeze that took Silver to $49.73 in April has taught the commercials how tight the physical silver market actually is, and that the commercials "appear to have no interest in massively shorting silver again". As a result, I look for silver to make massive gains in the near futures, as the commercials turn and go net long, resulting in $50 silver appearing "cheap" in the near future.
The big commercial silver shorts had a near death experience when the price approached $50 in April. They were at the end of their rope and needed to do something in a hurry. That’s why they rigged prices lower; so that they could buy and save themselves. These well-connected commercials knew, perhaps for the very first time, just how tight the silver market had become and how close we were to a profound physical shortage. The key is that the silver shortage wasn’t caused by excessive speculative buying or a bubble or a mania. The extreme tightness and near shortage in silver was as a result of the gradual and cumulative impact of normal investment buying over the past five years. There is nothing to suggest that the long term and steady silver investment buying has ended.

Goldman Sachs Group Inc.
Files 8k Form Initializing $15,000,000 in Gold-Linked Bonds
By Tekoa Da Silva BullMarketThinking.org
.... Additionally–Will the sucking sound of this first filing be one of many to vacuum away market capital which would otherwise have been allocated to mine financing?
It appears likely. But the major elephant in the room remains MF Global. The ramifications of their bankruptcy event have yet to be fully seen in the marketplace, and in this writer’s opinion, MF Global will be the first of many high-profile broker-dealer bankruptcies coming in the years ahead. Although short term pain, setbacks, and competing products continue to mount pressure on gold and silver mining share investors, when the final bankruptcy extinction-level event ripples through the global financial system, physical metal holders and mine owners will the be the kings and queens of tomorrow’s financial elite.

Russia, Iran Proceed With Bilateral Trade,
Drop Dollar; Russian Warships Park In Syria;
Iran Accelerates Nuclear Enrichment
Submitted by Tyler Durden - ZeroHedge.com
For anyone wondering how the abandonment of the dollar reserve status would look like we have a Hollow Men reference: not with a bang, but a whimper... Or in this case a whole series of bilateral agreements that quietly seeks to remove the US currency as an intermediate. Such as these: "World's Second (China) And Third Largest (Japan) Economies To Bypass Dollar, Engage In Direct Currency Trade", "China, Russia Drop Dollar In Bilateral Trade", "China And Iran To Bypass Dollar, Plan Oil Barter System", "India and Japan sign new $15bn currency swap agreement", and now this: "Iran, Russia Replace Dollar With Rial, Ruble in Trade, Fars Says." And ironically, the proposal to dump the greenback did not come from Iran. Per Bloomberg: "Iran and Russia replaced the U.S. dollar with their national currencies in bilateral trade, Iran’s state-run Fars news agency reported, citing Seyed Reza Sajjadi, the Iranian ambassador in Moscow. The proposal to switch to the ruble and the rial was raised by Russian President Dmitry Medvedev at a meeting with his Iranian counterpart, Mahmoud Ahmadinejad, in Astana, Kazakhstan, of the Shanghai Cooperation Organization, the ambassador said."

Iran to launch nuclear work in bunker in "near future"
By Parisa Hafezi
(Reuters) - Iran will in the "near future" start enriching uranium deep inside a mountain, a senior official said, a move likely to further antagonize Western powers which suspect Tehran is seeking nuclear weapons capability.
A decision by the Islamic Republic to conduct sensitive atomic activities at an underground site - offering better protection against any enemy attacks - could complicate diplomatic efforts to resolve the long-running row peacefully.

American, British, Israeli and Iranian Warships
Sailing Towards Confrontation
Submitted by George Washington - ZeroHedge.com
The U.S. and Israel are conducting their largest-ever joint warfare exercises near Iran. And see this.
England is sending its most advanced ship – the HMS Daring – to the region.
Only days after finishing its last wargames in the Strait of Hormuz, Iran has announced another set of wargames in February.
WHAT COULD GO WRONG?
Looking behind the headlines:

• The people pushing for war against Iran are the same neocons who pushed for war against Iraq. See this and this.
• China and Russia have warned that attacking Iran could lead to World War III.
• War against Iran was planned at least 20 years ago.

Iran, Israel and US plan Gulf exercises
By James Blitz in London - FT.com
Tension in the oil shipping lanes of the Gulf looks set to intensify amid indications that Iran, Israel and the US will hold military exercises designed to test weaponry and tactics.
As the US and European Union press ahead with oil sanctions on Iran, Tehran’s defence minister announced on Friday that the Iranian Revolutionary Guard Corps will hold large-scale exercises in the Strait of Hormuz and the Gulf next month.

Ex CIA Director Warns Iran on 'Inexorable' Path to Nukes
By Paul Scicchitano and Fred Fleitz - MewsMax.com
Gen. Michael Hayden, former director of the CIA, warns that Iran is on an "inexorable" path to develop a nuclear capability and that the time has come for international unity for the broader good.
Hayden declared in an exclusive interview with Newsmax.TV on Friday that Iran is shaping up to be the single biggest threat of 2012.

Iran on edge over upcoming elections
Parliamentary elections in March seen as the most sensitive in the history of the Islamic republic
By Saeed Kamali Dehghan - Guardian.co.uk
Iran is set for what its senior officials have described as "the most sensitive" elections in the history of the Islamic republic, amid economic and political discontent at home and fears of a major confrontation with the west over its nuclear programme.
More than 5,000 candidates have put their names forward for parliamentary elections in March, the first national vote since the 2009 disputed presidential poll when popular uprisings against the results challenged the legitimacy of the regime.

Forget inflation: Is deflation the real threat?
By John Waggoner, USA TODAY
Ask most investors what they worry about, and they'll tell you it's inflation — specifically, a period of soaring prices that destroys the value of the dollar.
But a growing number of economists and money managers are starting to worry about the opposite of inflation: deflation, a period of falling prices and declining incomes.
Sure, the government's consumer price index has gained 3.5% the past 12 months. Even stripping out food and energy, the CPI is up 2.1%, the Bureau of Labor Statistics says. And anyone who lives in the real world knows you can't live without food and energy.

Oil Pipeline Bypassing Hormuz
Said to Be Delayed as Iranian Tensions Mount
By Bruce Stanley and Ayesha Daya - Bloomberg.com
A pipeline that would allow oil from the United Arab Emirates to bypass the Strait of Hormuz separating it from Iran has been delayed because of construction difficulties, two people with knowledge of the matter said.
As many as 270 construction issues have pushed back the completion date, said the two people, declining to be identified because they’re not allowed to speak publicly on the matter. The $3.3 billion project won’t be ready until at least April, one of them said. Abu Dhabi, holder of most of the U.A.E.’s oil reserves, had planned to start exports in January 2011 through the pipeline to a port outside the strait, Dieter Blauberg, the project’s former director, said in May 2009.

Durable during two years of crisis, the euro begins to slide
By Howard Schneider - WashingtonPost.com
Through two years of crisis, the embattled euro has stayed comparatively strong against the dollar, falling as Europe lurched from one difficulty to another but always rebounding.
But in recent weeks, the currency has begun a downward slide that some analysts see as longer lasting, reflecting the region’s worsening economic conditions.
A corrosive dynamic could be taking hold with European governments adopting austerity measures, banks scaling back credit to meet new regulatory demands and households and companies hunkering down for a possible recession.

'Dollar could hinder gold, but fundamentals still
LONDON (Commodity Online): Deutsche Bank said it still views gold’s underlying fundamentals as bullish and it anticipates a stronger U.S. dollar over the next few months will hinder advances for the yellow metal.
"The persistence of negative real interest rates will sustain the appeal of holding gold. We also expect central-bank Goldbuying will continue and that tail-event risk as it relates to the European sovereign-debt crisis and the ECB’s balance sheet will encourage Gold prices to recover," bank added.

Big tax break depends on difference
between being investor and being businessman
By John Aloysius Farrell - WashingtonPost.com
Todd Dagres, a prominent venture capitalist and independent movie producer, earned $3.5 million in 2003 and paid not a cent in federal income tax.
The IRS challenged the math and sent Dagres a bill for $981,980 in back taxes, plus $196,369 in penalties.
Dagres lawyered up. His attorneys waived one lucrative tax break to exploit an even better one and claimed victory in the case in March.

An Appalling Idea, Even by Washington Standards
by: Robert Greenstein - OffTheChartsBlog.org
For legislation to extend the payroll tax cut through the end of 2012, House Republicans are expected to push for a provision on unemployment insurance (UI) that is appalling even by current Washington standards. Neither President Obama nor Congress should accept any payroll-tax legislation that includes it. Here’s why:
The provision, part of a full-year payroll-tax bill that the House passed in December, would deny UI benefits to any worker who lacks a high school diploma or GED and is not enrolled in classes to get one or the other — regardless of how long the person worked or whether he or she has access to adult education, which itself has been subject to significant budget cuts in the past few years and is heavily oversubscribed.

China data, Geithner trip on Asia’s agenda
By Michael Kitchen, MarketWatch
LOS ANGELES (MarketWatch) — China’s economy and its relations with the U.S. will likely be in focus in Asia during the coming week, as the markets begin to rev back up from the holiday season.
With investors across Asia awaiting policy-easing moves from Beijing, Chinese inflation numbers may prove key, as they will offer clues as to how much the central bank can loosen policy without risking a large run-up in prices.

Crisis Conditions Grip Eurozone
by Stephen Lendman - ThePeoplesVoice.org
From inception, the euro system was doomed to fail. In the 1990s, Progressive Radio News Hour regular Bob Chapman predicted it.
So didn't British economist/euro expert Bernard Connolly before its January 1999 introduction. His 1995 book titled, "The Rotten Heart of Europe: The Dirty War for Europe's Money" explained the risks in detail enough to understand.
More recently, he said troubled Eurozone countries can't cut their way to recovery. Austerity is a hairbrained disastrous policy. So is the "malignant lunacy of monetary union," combining 17 dissimilar countries under one monetary/fiscal system.

Davos:
10 power brokers to watch at the World Economic Forum
In just two weeks' time, global power brokers will meet in Switzerland in an attempt to pull the eurozone back from the brink of destruction.
By Louise Armitstead - Telegraph.co.uk
Fur and finance, snow and supremacy: there are just two weeks to go before global leaders converge at the World Economic Forum's annual jamboree in the Alpine resort of Davos.
Off the piste the heady mix of royalty, billionaire tycoons and top politicians are officially tasked with tackling "The Great Transformation: Shaping New Models".
Rarely has a conference title had more poignant urgency: the European Union leaders' summit on the advancing debt crisis follows immediately on January 30. Germany's Angela Merkel, France's Nicolas Sarkozy, Christine Lagarde of the IMF and Mario Draghi, the boss of the European Central Bank (ECB), are among those most likely to spend the week crafting mechanisms to prevent the eurozone sliding off a precipice.

Monti Says No More Budget Cutting Needed
to Balance Italian Budget by 2013
By Andrew Davis - Bloomberg.com
The Italian government will not have to carry out an additional package of budget cutting measures to meet its goal of eliminating its deficit in 2013, Prime Minister Mario Monti said.
His government will now focus on producing a package of measures to spur economic growth and competitiveness in Italy to be presented before a meeting of European Union finance chiefs on Jan. 23, Monti said on the "Che Tempo Che Fa" talk show on state-owned RAI television.

Hungary Has No Preconditions
in Aid Talks With IMF, Ready to Apply Plan
By Edith Balazs - Bloomberg.com
Hungarian Prime Minister Viktor Orban abandoned all previous objections to a bailout from the International Monetary Fund, indicating his government was open to "any kind" of credit line to prop up financing.
"As far a we’re concerned, there’re no preconditions during negotiations, all issues that the involved parties deem necessary can be debated," Orban said in an interview with state news service MTI today. Tamas Fellegi, the country’s chief negotiator in aid talks, has a mandate to accept "any kind" of credit line that strengthens the country’s market financing, Orban said.

Bullard Says New Quantitative Easing Unlikely
By Vivien Lou Chen and Meera Louis - Blomberg.com
Federal Reserve Bank of St. Louis President James Bullard said the Fed probably won’t begin a new round of bond purchases following "encouraging" data showing the U.S. economy gained 200,000 payroll jobs in December.
"Hopefully, we will keep this momentum going in 2012," Bullard told reporters yesterday after a speech in Chicago. "The tone of the data has been very strong" and the central bank "probably could wait and see for now" before deciding whether there is a need for more accommodation, he said.

Who's in charge the next time banks fail?
In his supremely readable memoirs, Nigel Lawson picks apart what he describes as the "Johnson Matthey debacle".
By Kamal Ahmed - Telegraph.co.uk
The year was 1984 and Lord Lawson received a telephone call at 6am on October 1 informing him that the Governor of the Bank of England wanted to see him "before the markets opened".
At the duly arranged meeting some 90 minutes later, Lord Lawson was informed that Johnson Matthey Bankers (JMB) was on the brink of collapse. The Bank would need to take JMB over or face a possible run on the bank's parent company, Johnson Matthey, a key player in the London bullion market. Sir Robin Leigh-Pemberton, the Governor, explained that there was no alternative as all other options – a private sector rescue – had been exhausted. JMB, he explained, had a very bad loan book. Losses could total £100m and the Treasury (and hence the taxpayer) was in line to make up any shortfall in funding that could not be provided by the Bank.

Banks Can Go Below Basel Minimum Liquidity Levels in Crisis
By Jim Brunsden - Bloomberg.com
Banks will be allowed go below minimum liquidity levels set by global regulators during a financial crisis so that they can avoid cash-flow difficulties.
"During a period of stress, banks would be expected to use their pool of liquid assets, thereby temporarily falling below the minimum requirement," the Basel Committee on Banking Supervision’s governing board said in a statement on its website today, following a meeting in the Swiss city.

New Law Will Investigate FDIC's Role in Bank Failures
BY: RYAN SCHUETTE - TheMReport.com
The New Year began without any bank failures, but one new law will task the FDIC inspector general with checking the books to see if the agency helped exacerbate failures in 2011.
The bill’s sponsors, Rep. Lynn Westmoreland (R-Georgia) and Sen. Saxby Chambliss (R-Georgia), hailed its passage in a joint statement.
"Community banks are the economic engine of our towns and cities, and the large number of failed banks in Georgia can have a devastating effect on our economic recovery," Westmoreland said.

SEC changes settlement rules
for companies found guilty of crimes
By David S. Hilzenrath - WashingtonPost.com
The Securities and Exchange Commission has modified its controversial policy of letting defendants settle cases without admitting or denying wrongdoing — but the change is so narrow and applies under such limited circumstances that one critic denounced it as "less than meaningless."
Until now, the SEC has condoned a contradiction. Defendants could plead guilty to criminal charges or be convicted of them and still settle related SEC civil cases by stating that they neither admit nor deny the agency’s charges.

'Renter Nation' rages on as new reality in U.S.
By Diana Olick, CNBC.com
Despite record low mortgage rates and rising affordability in most U.S. housing markets, rent is the new reality for former home owners and new households alike.
For some it is post-traumatic stress from the housing crash, for others it is the inability to get financing to buy a home. Either way, the rental market continues on its tear.
In the last quarter of 2011, the apartment sector saw its largest quarterly increase in occupied stock of the year, according to Reis Inc.

Freddie Mac to give unemployed homeowners a break
Freddie Mac will allow homeowners who lose their jobs to skip payments for up to a full year on loans backed by the mortgage giant.
By E. Scott Reckard, Los Angeles Times
Homeowners who lose their jobs will be able to skip payments on loans backed by Freddie Mac for up to a full year under a new policy taking effect Feb. 1 at the mortgage finance giant.
The change, doubling the forbearance extended to the unemployed, squares Freddie Mac's policies with those that its sister company, Fannie Mae, adopted in September 2010. The two firms, operating under government conservatorship since nearly melting down three years ago, own or guarantee more than half of all U.S. mortgages.

New rules allow
more holders of underwater mortgages to refinance
Changes in the Home Affordable Refinance Program, or HARP, remove some refinancing barriers for those with underwater loans backed by Fannie Mae or Freddie Mac.
By Liz Weston - Money Talk - LATimes.com
Dear Liz: I have an adjustable-rate mortgage that is currently at 3.125%. I'd like to fix the rate, but no one will even discuss it with me because my house has been appraised at less than $100,000 and the balance of the mortgage is $144,319. I have never been late, and my credit scores are above 800. What can I do? I don't want a mortgage modification. I just want a fixed rate.
Answer: If your loan was backed by Fannie Mae or Freddie Mac, and if it was originated before June 1, 2009, you may be in luck, thanks to recent improvements to the federal government's Home Affordable Refinance Program, or HARP.

Hidden Mortgage Tax
Gives Congress Another Way to Pick Your Pocket
BY DAVID ZEILER, Associate Editor, Money Morning
Americans had better enjoy the extra $40 they'll continue to get in their biweekly paychecks for the next two months, because most of them will be paying for it many times over in the form of higher mortgage costs.
Lost in the contentious debate over the payroll tax cut extension - a 2% cut in U.S. workers' Social Security tax - was the devious way Congress devised to pay for it.
The law that Congress passed - and U.S. President Barack Obama signed - included a provision that will increase a guarantee fee that finance companies Fannie Mae and Freddie Mac charge to mortgage loan originators - a fee that will get passed on to borrowers as a slightly higher interest rate.

Mortgage modification scams trap desperate homeowners
By Jennifer Dixon, Detroit Free Press - USAToday.com
The foreclosure crisis that has spread across the country is producing another epidemic: mortgage modification scams that have cost desperate borrowers thousands of dollars — even their homes.
"There are devastating consequences to this fraud," said Christy Romero, deputy special inspector general who monitors potential fraud in the federal Troubled Asset Relief Program (TARP).

White House calls for modest 0.5% pay raise
for federal civilian workers
By Ed O’Keefe - WashingtonPost.com
After a two-year freeze in federal workers’ salaries, President Obama will propose a 0.5 percent pay increase for civilian employees as part of his 2013 budget, senior administration officials said Friday.
The plan is likely to become part of an election-year confrontation between the White House and Congress over government spending. Republican lawmakers and presidential candidates have called for freezing basic pay rates for at least one more year, with some pitching it as a way to pay for extending the payroll tax cut.

Fed Policy Makers Urge More Housing Aid
By Scott Lanman and Vivien Lou Chen - Bloomberg.com
Three Federal Reserve policy makers said the U.S. government should try new ways to spur the housing market without agreeing about how much more the central bank needs to do to bring downinterest rates.
New York Fed President William C. Dudley said in New Jerseyyesterday that "additional housing policy interventions" can help boost growth, even as the Fed should consider further easing. Boston Fed President Eric Rosengren, speaking in Connecticut, took the more-aggressive position of supporting the purchase of mortgage-backed securities, while Fed Governor Elizabeth Duke said in Virginia that the central bank’s current monetary stance is "appropriate."

Fracking for oil, natural gas spurs sand mining in Midwest
By Steve Karnowski, Associated Press - USAToday.com
CHIPPEWA FALLS, Wis. – The rolling hills and scenic bluffs of western Wisconsin and southeastern Minnesota hide a valuable resource that has sparked what's been called a modern-day gold rush.
The object of desire is not gold but a soft sandstone needed by drilling companies to unlock underground natural gas and oil supplies in a controversial practice called hydraulic fracturing, or fracking.
Largely overlooked in the national debate over fracking is the emerging fight in the U.S. heartland over mining "frac sand," which has grains of ideal size, shape, strength and purity. Mining companies say the work provides good jobs in rural areas, but some residents fear the increase in mining could harm human health and the environment.

Five myths about the American dream
By Michael F. Ford - WashingtonPost.com
Few ideas are as central to American self-identity as the “American dream.” Politicians invoke it, immigrants pursue it, and despite unremittingly negative economic news, citizens embrace it. But what is the American dream? We began regular study of how people define and perceive the dream three years ago, and have discovered many misunderstandings worth a second look.

New Jersey Will Pay You $1000
To Destroy The 2nd Amendment
Submitted by Tyler Durden - ZeroHedge.com
There is nothing more disgusting or detestable than a citizen informant. Without citizen informants, tyrants could never retain the kind of power they wield. In fact, without citizen informants, totalitarian movements would never gain traction. This is why EVERY functional oligarchy throughout history has implemented programs designed to encourage the development of common spies, using the promise of monetary reward, or collective recognition.
Sadly, there are many in our society that would gladly sell out their closest friends and family to the tortures of authoritarian bureaucracy for nothing more than a firm pat on the head and a few fiat dollars. If there was ever a more degraded lot of bottom feeding opportunist scum, the citizen informant is the very epitome.

Cadillac Reveals Compact ATS
Sport/luxury sedan designed to compete with German models is due for unveiling at the Detroit Auto Show.
By Bob Golfen - Automotive.SpeedTV.com
Cadillac today introduced its 2013 compact sports/luxury sedan, the ATS, prior to its unveiling at the Detroit Auto Show this week, revealing the all-new car designed to compete with such premium compacts as the BMW 3-Series and Mercedes-Benz C-Class that dominate the segment.
With the styling of Cadillac’s new Art and Science credo, the rear-drive sedan boasts the lowest curb weight – 3,400 pounds – of its class along with the choice of three engines, two four-cylinders and a V6.

Where Did Nine Million Cable Subscribers Go?
By Peter Kafka - AllThingsD.com
New year, new chance to talk about cord-cutting/shaving/avoiding. Which is either a big deal that’s going to get bigger, or basically imaginary, depending on who you like to listen to.
If you’re in the big-deal camp, then you’ll like a new survey from Deloitte, which finds that a staggering one in five U.S. residents say they have either cut the cord or are thinking about doing it. The breakdown: Nine percent of survey respondents say they’ve recently cut the cord and are getting their shows from Netflix, Hulu, iTunes, etc. And another 11 percent say they might do it.

Apple coming to Target?
From Best Buy to Apple: The Transformation of Retail
By Tim Carmody - Wired.com
All Best Buy stores sell Apple products. Over 600 of them feature dedicated "Apple Shops," hands-on "stores within stores" that prominently feature Apple’s full line and (in 250 stores) specially trained solution consultants.
Apple Shops don’t just extend the reach of Apple’s own retail stores; they’re an oasis in the giant and often disorienting desert of warehouse-style big-box retail. Even if you don’t use a Mac, the shops just look and feel nice. Borrowing Steve Jobs’ joke about running iTunes on Windows, these tidy little Apple shops can feel like giving a glass of ice water to someone in hell.

David Cameron: we will not negotiate over the Falklands
There is "no question of negotiating" with Argentina over the sovereignty of the Falkland Islands, David Cameron pledged on Sunday.
By Robert Winnett - Telegraph.co.uk
The Prime Minister said that he had spent a "serious amount of time" ensuring the security of the Falklands amid renewed Argentinian hostility over the islands.
Last month, the Argentinian president called for urgent talks over the future of the islands and South American countries banned ships from the Falklands using their ports.

Argentina's Capital Flight
The government clamps down as the economy deteriorates and capital attempts to flee the country.
By Mary Anastasia O'Grady - WSJ.com $$
[Google title for free article pass]
Travelers in Latin America are accustomed to the sight of trained dogs searching luggage for illegal narcotics. But last month Argentine President Cristina Kirchner began employing her teams of savvy canines to root out a "crime" that she has reason to fear more than drug trafficking: the flight of dollars to Uruguay.
Argentina imposed capital controls in 2002 and in November tightened them again, requiring all currency transactions to be authorized by the tax agency on a discretionary basis. Then came the dollar-sniffing brigades, and not only at the airport. Beachcombers traveling by car ferry across the Rio de la Plata this summer are being met by four-legged inspectors on the prowl for greenbacks leaving the country.

China syndrome dictates Barack Obama's Asia-Pacific strategy
Obama has no wish to conjure the spectre of a new cold war but is determined to beat back any Chinese bid for hegemony
By Simon Tisdall - Guardian.co.uk
Barack Obama made a special trip to the Pentagon this week to unveil America's post-Iraq, post-Afghanistan defence strategy. But amid all the president's talk about a leaner American military, evolving challenges of the new century, and shifting priorities after a decade of warfare, one particular word was nowhere to be heard: China.
The omission is understandable, but misleading. As a politician running for re-election as a peacemaker, Obama has no wish to conjure the spectre of a new cold war with the only serious challenger to America as number one global superpower.

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Friday 01.06.2012

Gold will soon target $2400/oz: Citi Bank
NEW YORK (Commodity Online): Gold prices will target $2400/oz in a snap back rally as the current sell-off is overdone, says Citi Bank analyst Tim Fitzpatrick. He however cautions that prices could fall to $1550 before resuming its upside move.
"Unless and until we see a weekly close below $1,535, we believe the uptrend in Gold has resumed and a move to $2,400 throughout the course of this year is on the card", he states in a research report.

Gold Has Longest Rally in 10 Weeks
on Iran 'Fear,' U.K. Warning on Hormuz
By Debarati Roy - Bloomberg.com
Gold futures rose, capping the longest rally in 10 weeks, after U.K. Defense Secretary Philip Hammond said the country may take military action if Iran carries out its threat to block the Strait of Hormuz.
Any attempt by Iran to close the waterway in retaliation for sanctions against oil exports would be “illegal and unsuccessful,” and the Royal Navy will join any action to keep shipping lanes open, Hammond said today in a speech in Washington. Gold climbed as much as 0.9 percent to a two-week high.

Gold Traders Most Bullish
in Month After Bear Market Averted
By Nicholas Larkin - Bloomberg.com
Gold traders are the most bullish in a month as Europe’s deepening debt crisis and increasing tensions over Iran drove the metal to its longest winning streak since October.
Ten of 22 surveyed by Bloomberg expect the metal to gain next week and five were neutral, the highest proportion since Dec. 9. The U.S. Mint sold 45,500 ounces of American Eagle gold coins this month, compared with 65,500 ounces in the whole of December and 41,000 in November, data on its website showed.

Jim Sinclair: "MF Global
is A Piece of Dynamite
Sitting Underneath the Gold Price" 1/2

Jim Sinclair: "MF Global
is A Piece of Dynamite
Sitting Underneath the Gold Price" 2/2

Gartman admits he made a bad call on gold
John Shmuel - FinancialPost.com
Investment letter writer Dennis Gartman has declared that he was wrong about gold.
In his daily investment letter Thursday, Mr. Gartman officially reversed his outlook for gold, saying he now views the precious metal as being in a bull market.
The new position follows a month where Mr. Gartman was the subject of some high-profile name calling from fellow investment letter writer, Peter Grandich. Mr. Grandich called Mr. Gartman “one of the Three Stooges” of gold forecasting after the latter declared that gold was officially in a bear market (if you’re wondering, the other two accused of being in that trio are Jeff Christian of CPM Group and Jon Nadler of Kitco).

Was 2011 the End of the Gold Rush?
BY PETER D SCHIFF - FinancialSense.com
For such a wonderful year for precious metals investors, the final calendar quarter left little to celebrate. Just as people now take for granted that their phones will also take pictures, play music, and surf the internet, many investors have come to expect gold and silver to move up in a straight line.
In fact, in a recent CNBC interview one analyst claimed that gold's recent correction proves that it is not really a safe haven. In truth, such a statement merely proves how little some analysts know about markets.

Gold and the Collapsing Economy

SocGen Paces
French Bank Share Slide as Government Sells Debt
By Fabio Benedetti-Valentini - Bloomberg.com
Societe Generale SA (GLE) paced a decline by French bank shares as the government offered investors higher yields to complete its first sovereign-debt sale of the year.
Societe Generale (GLE), France’s second-largest bank, slid 4.4 percent to 16.25 euros at 12:56 p.m. local time, giving it a market value of 12.6 billion euros ($16.2 billion). BNP Paribas SA (BNP), the nation’s biggest bank, fell 3.4 percent, to 29.60 euros.
France sold 7.96 billion euros of debt today as credit- rating companies threaten to cut the nation’s AAA rating, potentially constraining the state’s ability to help banks if the region’s debt crisis worsens. Financial shares have also suffered after Italy’s UniCredit SpA (UCG) offered a 43 percent discount to raise 7.5 billion euros in a rights offering and bolster its capital.

Ann Barnhardt & Warren Pollock Have an Open Conversation
Ann Barnhardt and I (Warren Pollock) have an open conversation organized to provide background to this crisis, the setting of legal precedent, netting, settlement, and future trends including a potential bank holiday. We talk about MF Global as it applies to savings and commercial banking, brokerage, insurance, and commodities. We talk about numeric impossibility of solving the problem, incest between government and finance, having the victim of the crisis pay rather than the fraudster. We explain how the MF Global bankruptcy process will define how customer funds will be treated in a bank holiday. We talk about the idea of having an honest bank holiday to root out fraud vs an economic crisis which plays to looting and criminal activity of vested interest.

The Corzines Went Château Shopping
Right Before MF Global Went Under
By ALEXANDER ABAD-SANTOS -TheAtlanticWire.com
Even though we haven't quite found MF Global's $1.2 billion that went missing, Vanity Fair did find out he and his wife Sharon were talking about a château they were about to buy in the South of France. The preview of the February issue's Corzine exposé is up online--complete with cocktail party anecdotes from their 1 percent-sounding acquaintances. If you ask us, this haughty "Not Cap Ferrat" insult is the best (and worst) part:

"It’s not in Cap Ferrat," one person recalls Elghanayan saying, perhaps to mitigate the extravagance. "To buy any decent château is at least a couple of million euros," explains another person who was at the party, "and that is before the renovation with the air-conditioning and the new kitchen. Sharon was very excited. She said she was flying down there on Monday morning."

The Joke is on the Rest of Us
Have the Super-Rich Seceded from the United States?
by MIKE LOFGREN - CounterPunch.org
It was in 1993, during congressional deliberation over the North American Free Trade Agreement. I was having lunch with a staffer for one of the rare Republican members of Congress who opposed the policy of so-called free trade. I distinctly remember something my colleague said: “The rich elites of this country have far more in common with their counterparts in London, Paris, and Tokyo than with their own fellow American citizens.”
That was just the beginning of the period when the realities of outsourced manufacturing, financialization of the economy, and growing income disparity started to seep into the public consciousness, so at the time it seemed like a striking and novel statement.

Is The Fed Bailing Out Europe?
BY CHRIS CIOVACCO - FinancialSense.com
With the S&P 500 heading toward the October lows on the Friday after Thanksgiving, the ever market manipulating central banks just had to do something. The decision was made on Monday, November 28 to provide a stealth bailout for European banks, and indirectly poorly managed sovereigns. Gerald Driscoll, the former Vice President of the Federal Reserve Bank of Dallas, penned an opinion piece which appeared in the Wall Street Journal on December 28. He stated in no uncertain terms:
No matter the legalistic interpretation, the Fed is, working through the ECB, bailing out European banks and, indirectly, spendthrift European governments. It is difficult to count the number of things wrong with this arrangement.

Look Out Below –
The Nightmarish Decline Of The Euro Has Begun
TheEconomicCollapseBlog.com
The euro is a dying currency. On Thursday, the EUR/USD fell below 1.28 for the first time since September 2010. In fact, as I write this the EUR/USD is sitting at 1.2791. Back in July, the EUR/USD was over 1.45. But this is just the beginning. The euro is going to go a lot lower. At this point, there are several major European nations that are on the verge of default, the European financial system is overflowing with debt and toxic assets, and most major European banks are leveraged about as badly as Lehman Brothers was when it collapsed. Most Americans simply do not grasp the gravity of what is happening. Just because the Dow is sitting above 12000 and a few U.S. economic numbers have improved slightly does not mean that everything is going to be okay. As I wrote about recently, the EU has a bigger economy than we do and they have a bigger banking system than we do. U.S. banks are massively exposed to European sovereign debt and European banking debt. When the financial system of Europe collapses and the euro falls apart it is going to rock the entire planet. So you better look out below - the euro is coming down and it is coming down hard. After the euro implodes, nothing is every going to be the same again.

2012 Stock Market Outlook - Fed ECB

Backdoor QE, Fractional Reserve Banking, and Insolvency
Interpreting the Activity of Banks and the ECB Correctly
BY PATER TENEBRARUM - FinancialSense.com
It appears that market observers are only very slowly coming around to grasping the fact that what the ECB has done in December does indeed amount to a major dose of monetary pumping. The misunderstandings center mainly on the use of the ECB's deposit facility by banks, which overshadows the far more legitimate debate over whether the commercial banks are going to use ECB funding to play the sovereign debt carry trade or rather 'play it safe' in view of the large amount of bank bonds maturing in the first quarter.

Gerald Celente on France 24 - 30 December 2011

Hungary open to discuss IMF standby deal,
has rough bond auction with rising rates
By AP - WashingtonPost.com
BUDAPEST, Hungary — Hungary struggled through a poor bond auction Thursday and its top financial negotiator said his nation was open to working out a standby loan with the International Monetary Fund.
Negotiator Tamas Fellegi insisted that Hungary was still able to finance its debts from the markets — but that time appeared to be rapidly evaporating.
Hungary’s debt management agency sold less than the full amount on offer at an auction of 12-month Treasury bills, with the average yield rising to 9.96 percent — more than 2 percentage points higher than at a similar auction Dec. 22. That is also significantly higher than the 7 percent level that forced three other European nations to seek bailouts.

Fed says expand Fannie, Freddie role to aid housing
By Mark Felsenthal and Margaret Chadbourn
(Reuters) - The U.S. government-run mortgagefinance firms Fannie Mae and Freddie Mac could play a bigger role in turning around the battered U.S. housing market, the Federal Reserve told Congress, a call that looks set to run into stiff political opposition.
The Fed, in a paper sent to lawmakers on Wednesday, outlined an array of steps that could be taken to help the housing sector, including allowing Fannie and Freddie to provide cheaper mortgages to a broader pool of homeowners.

Apartment Vacancies in U.S. Decline
to a Decade Low as Rental Rates Climb
By Hui-yong Yu - Bloomberg.com
U.S. apartment vacancies dropped to a 10-year low in the fourth quarter, allowing for rent increases that are likely to continue this year, Reis Inc. (REIS) said.
The vacancy rate fell to 5.2 percent, the lowest since the end of 2001, the New York-based property research firm said in a report today. It was 5.6 percent in the previous three months and 6.6 percent a year earlier. The average monthly effective rent, or what tenants paid after landlord giveaways, climbed 2.3 percent from a year earlier to $1,009, Reis said.

BofA Surges on Speculation of Mortgage Plan
By Hugh Son and Lorraine Woellert - Bloomberg.com
Bank of America Corp. (BAC), the second- biggest U.S. lender, surged the most in two months of trading amid speculation that the U.S. may introduce a new mortgage refinancing program.
The bank rose 50 cents, or 8.6 percent, to $6.31 at 4:15 p.m. in New York, then forfeited some of the gain in late trading after an Obama administration official who asked for anonymity denied speculation that the White House is considering a trillion-dollar plan to refinance home loans.

Mass Home Refinancing Rumor Rejected,
And Why Even If It Was True It Would Not Help BAC
Submitted by Tyler Durden - ZeroHedge.com
Looking for a reason why the surge of BAC has been abruptly halted after hours? Look no further - as predicted earlier, when we commented on the periodic reincarnation of the always false global refi rumor which served among other things to push BAC higher by almost 10%, the rumor was found to be false... all over again. In other words no refi, no benefit to TBTF, and all of today's gains are based on what Bloomberg noted was a report issued yesterday by a Jaret Seiberg, who until recently was an employee of MF Global, and has since been acquired with his entire Washington Research Group by none other than Guggenheim partners, which just happens to be run by former Bear Stearns exec Alan Scwhartz. From Bloomberg, here is the official denial (which came literally seconds after market close):

Keiser Report: Wall Street saints above God & law (E232)

Wells Fargo Faces Scrutiny
by Investors on Mortgage Bonds
By Dakin Campbell - Bloomberg.com
A bondholder group that won an $8.5 billion settlement (BAC) fromBank of America (BAC) Corp. on securities backed by soured home loans may also seek payments from Wells Fargo & Co. (WFC), the nation’s biggest mortgage lender.
The law firm Gibbs & Bruns LLP said in a statement today it’s seeking information on pools securing more than $19 billion of residential mortgage-backed securities issued by affiliates of Wells Fargo. The firm represents clients holding more than 25 percent of the voting rights in 48 bond trusts that issued the securities, according to the statement.

January Surprise:
Is Obama preparing a trillion-dollar,
mass refinancing of mortgages?
By James Pethokoukis - American.com
This could be just the beginning. If President Barack Obama’s legally dodgy appointment of Richard Cordray to head the consumer finance agency should stick, it may open the door to more such actions. Here’s Jaret Seiberg of the Washington Research Group:

To us, the most important takeaway from a recess appointment of Cordray is that the President could use this same maneuver to put a housing advocate in charge of FHFA.

And why is that important? The Federal Housing Finance Agency is the regulator and conservator of Fannie Mae and Freddie Mac. And the FHFA currently has an acting director, Edward DeMarco. If Obama replaces him with a “housing advocate” via the same recess appointment process, here’s what might happen next, according to Seiberg:

Capital Account: Paul C. Roberts,
"Ron Paul has his hands full trying to restore the Constitution"

Wisconsin Gov. Walker: Unions 'want me dead'
By Ben Wolfgang - The Washington Times
With a June recall election all but certain, Wisconsin Gov. Scott Walker says the debate is no longer just about collective-bargaining rights for state workers. Union leaders and others, he said, have made it personal.
"They want me dead. I don’t think that’s an exaggeration," Mr. Walker said in an exclusive interview with The Washington Times after a roundtable discussion Thursday at the American Enterprise Institute.

IRS could face glut of health law tax appeals
By Paige Winfield Cunningham - The Washington Times
A watchdog is urging the IRS to make sure it is prepared for an anticipated blitz of taxpayer appeals involving dozens of new tax credits and penalties under President Obama’s health care law.
In an audit released Thursday, the Treasury’s inspector general for tax administration said the IRS appeals division is doing some preparation, but that it should take a more formal approach to make sure it’s ready to handle heavier caseloads in 2014 — the year when key provisions of the Affordable Care Act go into effect.

Insurers Profit From Health Law They Fought
By Sarah Frier - Bloomberg.com
Insurance companies spent millions of dollars trying to defeat the U.S. health-care overhaul, saying it would raise costs and disrupt coverage. Instead, profit margins at the companies widened to levels not seen since before the recession, a Bloomberg Government study shows.
Insurers led by WellPoint Inc. (WLP), the biggest by membership, recorded their highest combined quarterly net income of the past decade after the law was signed in 2010, said Peter Gosselin, the study author and senior health-care analyst for Bloomberg Government. The Standard & Poor’s 500 Managed Health-Care Index rose 36 percent in the period, four times more than the S&P 500.

No Doctor For You: How The Federal Government Is Chasing Millions Of Good Doctors Out Of The Medical Profession
EndOfTheAmericanDream.com
Most Americans do not realize this, but we are on the verge of a major doctor shortage in the United States. All over America, good doctors are going broke. The way that our health care system is currently set up, they simply cannot make it. These days a lot of politicians are warning us about the dangers of "socialized medicine", but the truth is that we already have it. About half of all health care dollars in the United States are now spent by the federal government, and a lot of health insurance companies base reimbursements on what the federal government does. In addition, there are a whole host of parasites that have gotten between the doctor and the patient these days. Everyone wants a piece of the health care pie. Health insurance companies, pharmaceutical giants, lawyers, health care "administrators" and government bureaucrats all make a sweet living off of the doctor/patient relationship. It really is sickening. And now Obamacare is going to make things much, much worse. As you will read about later in this article, a stunning percentage of doctors say that they plan to leave the medical profession because of Obamacare. What this means is that we are headed for a chronic doctor shortage and there is a good chance that there will be no doctor for you when you really need one in the years ahead.

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Murder of The Constitution
in Full Public View
by Congress & Obama: Paul Craig Roberts 1/2

Murder of The Constitution
in Full Public View
by Congress & Obama:
Paul Craig Roberts (new web site) 2/2

Cuba, the Embargo and the Digital Divide
by SUE ASHDOWN and NELSON P. VALDES - CounterPunch.org

"You have to figure out how you can reach the informed masses. The solution is not the newspapers… Internet is more accessible." -–Fidel Castro, November 12, 2010 [1]

There is a lot of discussion about Cuba and Internet access and how many Cubans are not connected to it. Oddly enough, most of the critics assume that having access is merely dependent on political will. A recent report by Nick Miroff for NPR’s "All Things Considered" was titled "In Cuba, Dial-Up Internet Is a Luxury." The report did not address the issues of infrastructure cost; rather, those matters were disregarded.
Critics like these do not seem to be aware of the actual financial costs of the technology involved. Moreover, technology continues to advance quickly while costs continue to increase. This is not always immediately evident when an advanced piece of technology appears to deliver a far superior product at a relatively cheaper price, compared with preceding technology. However, when the obsolescence – both planned and unplanned – of the interconnecting equipment is considered, the cost pressures are clear. Ultimately, it becomes ever more difficult for the poor within a nation or among nations – to catch up.

Swank sushi:
Bluefin tuna nets $736,000
at Tokyo auction, easily beating old record
By AP - WashingtonPost.com
TOKYO — This tuna is worth savoring: It cost nearly three-quarters of a million dollars.
A bluefin tuna caught off northeastern Japan fetched a record 56.49 million yen, or about $736,000, Thursday in the first auction of the year at Tokyo’s Tsukiji fish market. The price for the 593-pound (269-kilogram) tuna beat last year’s record of 32.49 million yen.

What Killed Kodak?
Eastman Kodak is on the verge of bankruptcy,
and not just because film is dying.
By Jordan Weissmann - TheAtlantic.com
Barring a drastic turn of events, Eastman Kodak, the 131-year-old stalwart of American photography, may be headed for bankruptcy. According to the Wall Street Journal, the company will file for Chapter 11 in "the coming weeks" unless it can sell off a valuable portfolio of patents. The business icon that brought picture taking to the masses is burning its furniture to keep warm.
Kodak fits the classic profile of a 20th-century corporate dinosaur. Its headquarters are cloistered in sleepy Rochester, New York. It built itself selling camera film, a business that's been pushed into obsolescence by the digital revolution.

Boeing Betrayal Stirs Wichita
After City Helped Win Tanker Bid, Mayor Says
By Darrell Preston, David Mildenberg and Susanna Ray - Bloomberg.com
Boeing Co. (BA)’s decision to shut down its Wichita, Kansas, plant after more than 80 years betrayed public officials who helped the plane maker win a U.S. Air Force contract for midair refueling tankers, the city’s mayor said.
Boeing didn’t consult with city officials or ask for financial incentives to stay put before announcing its decision yesterday to close the Wichita (10557MF) plant with 2,160 workers before 2014, Mayor Carl Brewer said in a telephone interview. The company had indicated that winning the tanker work last year would support 7,500 local jobs, he said.

Anonymous's War Against Neo-
Nazis Isn't Winning Allies in Germany
By ADAM CLARK ESTES - TheAtlanticWire,com
People call Anonymous a lot of bad words, but hypocritical is seldom one of them. The hacktivist collective's latest Germany-centric crusade against the bigotry and hatred of neo-Nazis is drawing ire from all sides. Codenamed Operation Blitzkrieg (or #OpBlitzkrieg) the project seems mostly focused on exposing the identities of neo-Nazis by posting customer databases on a WikiLeaks-style website called, not-so-creatively, Nazi-Leaks.net. Though Anonymous has been going after neo-Nazi groups for weeks, the operation took off this week thanks to some exposure in the German press and, oddly enough, some heavy criticism for the obvious invasion of privacy.

Obama Promises
Not to Use Military Detention for U.S. Citizens—I Think
Jacob Sullum - Reason.com
When he signed the National Defense Authorization Act on Saturday, President Obama issued a statement that addresses its controversial provisions regarding his authority to detain terrorism suspects (emphasis added):

Section 1021 affirms the executive branch's authority to detain persons covered by the 2001 Authorization for Use of Military Force (AUMF)....This section breaks no new ground and is unnecessary. The authority it describes was included in the 2001 AUMF, as recognized by the Supreme Court and confirmed through lower court decisions since then. Two critical limitations in section 1021 confirm that it solely codifies established authorities. First, under section 1021(d), the bill does not "limit or expand the authority of the President or the scope of the Authorization for Use of Military Force." Second, under section 1021(e), the bill may not be construed to affect any "existing law or authorities relating to the detention of United States citizens, lawful resident aliens of the United States, or any other persons who are captured or arrested in the United States." My Administration strongly supported the inclusion of these limitations in order to make clear beyond doubt that the legislation does nothing more than confirm authorities that the Federal courts have recognized as lawful under the 2001 AUMF. Moreover, I want to clarify that my Administration will not authorize the indefinite military detention without trial of American citizens. Indeed, I believe that doing so would break with our most important traditions and values as a Nation. My Administration will interpret section 1021 in a manner that ensures that any detention it authorizes complies with the Constitution, the laws of war, and all other applicable law.

Iran could close Hormuz -- but not for long
By Peter Apps, Political Risk Correspondent
(Reuters) - Should Iran's rulers ever make good their threats to block the Straits of Hormuz, they could almost certainly achieve their aim within a matter of hours.
But they could also find themselves sparking a punishing -- if perhaps short-lived -- regional conflict from which they could emerge the primary losers.
In recent weeks, a growing number of senior Iranian military and civilian officials have warned that Tehran could use force to close the 54 km (25 mile) entrance to the Gulf if Western states impose sanctions that paralyze their oil exports.

Ron Paul Vindicated on Iran (Unfortunately)
By Robert Wright - TheAtlantic.com
A week ago Ron Paul tried to convey how the ever-tightening sanctions on Iran--which may soon includean embargo on its oil--look from an Iranian point of view: It's as if China were to blockade the Gulf of Mexico, he said--"an act of war".
This is sheer conjecture; Ron Paul is no expert on Iran. But now someone who does have relevant credentials has weighed in, and the picture he paints is disturbingly reminiscent of the one Paul painted. It suggests we may be closer to war than most people realize.

Obama plans to cut tens of thousands of ground troops
By Laura MacInnis and David Alexander
(Reuters) - The Obama administration will unveil a "more realistic" vision for the military on Thursday, with plans to cut tens of thousands of ground troops and invest more in air and sea power at a time of fiscal restraint, officials familiar with the plans said on Wednesday.
The strategic review of U.S. security interests will also emphasize an American presence in Asia, with less attention overall to Europe, Africa and Latin America alongside slower growth in the Pentagon's budget, the officials said.

Obama announces new, leaner military approach
By Craig Whitlock and Greg Jaffe - WashingtonPost.com
The U.S. military will steadily shrink the Army and Marine Corps, reduce forces in Europe and probably make further cuts to the nation’s nuclear arsenal, the Obama administration said Thursday in a preview of how it intends to reshape the armed forces after a decade of war.
The downsizing of the Pentagon, prompted by the country’s dire fiscal problems, means that the military will depend more on coalitions with allies and avoid the large-scale counterinsurgency and nation-building operations that have marked the wars in Iraq and Afghanistan.

New Pentagon strategy stresses Asia, cyber, drones
By David Alexander and Phil Stewart
(Reuters) - President Barack Obama unveiled a defense strategy on Thursday that would expand the U.S. military presence in Asia but shrink the overall size of the force as the Pentagon seeks to reduce spending by nearly half a trillion dollars after a decade of war.
The strategy, if carried out, would significantly reshape the world's largest military from the one that executed President George W. Bush's "war on terrorism" in Iraq and Afghanistan.
Cyberwarfare and unmanned drones would continue to grow in priority, as would countering attempts by China and Iran to block U.S. power projection capabilities in areas like the South China Sea and the Strait of Hormuz.

Dubai, Fujairah Ports Are Busy as Usual
Amid Iran’s Hormuz Passage Threat
By Nayla Razzouk and Anthony DiPaola - Bloomberg.com
Dubai’s commercial port of Jebel Ali and terminals in Fujairah on the eastern coast of the United Arab Emirates operated normally today amid recent threats by Iran to block shipments through the nearbyStrait of Hormuz.
"If the Hormuz Strait was shut, it will affect business," Jim Williams, Middle East and North Africa Engineering Manager at Aesseal, which makes pump seals for the oil and gas industry, said in an interview in Jebel Ali today. "There will always be alternative routes, even if at more cost."

Lindsey Williams - Jeff Rense Radio - 02 Jan 2012

Debacle! How Two Wars in the Greater Middle East Revealed the Weakness of the Global Superpower
By Tom Engelhardt, TomDispatch - Truthdig.com
This piece originally appeared atTomDispatch.
It was to be the war that would establish empire as an American fact. It would result in a thousand-year Pax Americana. It was to be "mission accomplished" all the way. And then, of course, it wasn’t. And then, almost nine dismal years later, it was over (sorta).
It was the Iraq War, and we were the uninvited guests who didn’t want to go home. To the last second, despite President Obama’s repeated promise that all American troops were leaving, despite an agreement the Iraqi government had signed with George W. Bush’s administration in 2008, America’s military commanders continued to lobby and Washington continued to negotiate for 10,000 to 20,000 U.S. troops to remain in-country as advisors and trainers.

Egypt’s Envoy Says Israel Treaty Secure,
Defends Raids on Democracy Groups
By Indira A.R. Lakshmanan - Bloomberg.com
Egypt’s top envoy to the U.S. pushed back today against calls in Washington to withhold more than $1 billion in U.S. aid following raids on democracy groups in Cairo and dismissed concerns that Egypt might abandon its peace treaty with Israel.
"The Egyptian public recognizes the importance” of the peace treaty with Israel and the stability it promotes, Ambassador Sameh Shoukry said in an interview at the Bloomberg Washington bureau. "Egypt has no motivation to abrogate the treaty."
Shoukry downplayed comments attributed Jan. 1 to the deputy chief of the Muslim Brotherhood movement, whose Justice and Freedom Party is leading Egypt’s parliamentary elections. Rashad al-Bayoumi was quoted by Al-Hayat newspaper as saying the peace treaty might be put to a future referendum.

China-S. Korea to Discuss Trade, Kim Succession
By Shinhye Kang and Sangwon Yoon - Bloomberg.com
South Korean President Lee Myung Bak and Chinese President Hu Jintao will consider a free-trade agreement at a summit next week that will also include discussion of North Korea’s leadership succession.
"Both sides basically share the view that a free trade agreement between South Korea and China is needed," South Korean Foreign Minister Kim Sung Hwan said at a briefing in Seoul yesterday. Lee’s three-day trip begins Jan. 9, and he and Hu will also discuss how to"work together for the sake of peace and stability on the Korean peninsula," his office said in a statement.

Election 2012...

New Web site uses humor
to fact check political ads and political journalism
By Vanessa Williams - WashingtonPost.com
If Abraham Lincoln were running for president today, a campaign attack ad might go something like this:
(Cue sneering voice of ad announcer.) "Why should we trust you as president when as a lawyer you defended whiskey-hating women who smashed up a saloon, an admitted adultress and a wife who poisoned her husband?" A message at the end of the ad reads that it was "Paid for by white male property owners who know a woman’s place."
The Lincoln spoof aimed at high school and college students is featured on Flackcheck.org, a nonpartisan, nonprofit Web site launched Thursday with the goal of encouraging journalists and the public to be more vigilant in truth-squadding misleading political ads and candidates’ statements.

Alex Jones Obvious fraud in Iowa! 4.jan.2012

If Voters Cared About Liberty,
Ron Paul Would Be the Frontrunner
His platform has some serious flaws, but Paul is the only candidate standing up for individual liberties.
By Wendy Kaminer - TheAtlantic.com
"At least he's not crazy," Democrats observe, explaining why they'd rather lose to Mitt Romney than any other any Republican in the 2012 presidential race. Some are comforted as well by Romney's willingness to say anything or be anything to please his target voters. "At least he's not an ideologue." A cynic merely pretending to embrace ideas or opinions you disdain is preferable to a true believer.

Ron Paul on Freedom Watch w/ Judge Napolitano 1/4/12

Santorum, Huntsman and the Future of Conservatism
By E.J. Dionne, Jr. - Truthdig.com
MERRIMACK, N.H.—I love watching Republicans engage in class warfare. They condemn it as a sin when Democrats come within 100 miles of even mentioning the sharp and growing class inequalities in the United States. But when conservatives play the class card, they see doing so as a high ethical calling involving the defense of good and moral folk against the depredations of a liberal elite.
Blatant hypocrisy is instructive.

Signs of the Times with L.A. Marzulli

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Archived Page Link
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Thursday 01.05.2012

US Mint Silver Eagle sales jump 88%
to a record 3.2 million on first day of 2012
NEW YORK (Commodity Online): The US Mint has started 2012 with a bang, selling close to a jaw-dropping 3.2 millionSilver Eagles on the very first working day of 2012.
Considering that total 2011 sales had stood at around 39.8 million, the January 3rd sale is almost 8% of entire 2011 sale and higher than any single monthly sale in all of 2011!
As of the Mints's data, exact sales figure for Jan 3 stood 3,197,000 coins (approx 3.2 million). This is a more than 88% jump compared to 2011 first day sales of 1,696,000 coins.

First Time Ever:
Silver Sales Surpass Domestic Production
BY STEVE S ANGELO - FinancialSense.com
For the first time in history, Silver Eagle & Maple Leaf sales will surpass domestic silver production in the U.S. and Canada in 2011
The demand for American Silver Eagles and Canadian Maple Leaf coins has increased tremendously over the past several years. 2011 will be the first year in which official coin sales will surpass domestic silver production in both countries.
Even though each country has seen declines in their domestic silver production over the past decade, U.S. silver production declined a whopping 30% yoy (year over year) in October. According to the USGS in their most recent Silver Mineral Industry Survey, silver production fell to 81,400 kilograms in October—compared to 117,000 kilograms the same time last year.

* * * * *

Eight Strategic Factors to Consider in 2012
Written by Strategic Studies - OilPrice.com
Analysis. By Gregory R. Copley, Editor, and Yossef Bodansky, Senior Editor, GIS/Defense & Foreign Affairs.
Rarely in the past six decades has global context counted for as much in strategic forecasting — trend analysis — as it does at the dawn of 2012. Reliance on stove-piped analysis of “strategic sectors” — such as economic and financial issues, security issues, politics, geopolitics, resources and energy, sociology and religion, and so on — will produce skewed and unreliable estimates, and will tend to favor linear extrapolations of recent experience. A study of broad contextual factors, including an expanded view of history, will show how cycles and confluences of trends potentially play a greater disruptive role than at any time since the end of World War II.
We have, in recent writings, stressed the longer-term trends and outlook, but it is important to see how the strategic environment is likely to play out during 2012. Equally, it is important that these trends (and others) are seen collectively, and not separately.

Tensions in Strait of Hormuz, will crude rise to $200?
By John C K Daly - CommodityOnline.com
Since 24 December the Iranian Navy has been holding its ten-day Velayat 90 naval exercises, covering an area in the Arabian Sea stretching from east of the Strait of Hormuz entrance to the Persian Gulf to the Gulf of Aden. The day the maneuvers opened Iranian Navy Commander Rear Admiral Habibollah Sayyari told a press conference that the exercises were intended to show "Iran's military prowess and defense capabilities in international waters, convey a message of peace and friendship to regional countries, and test the newest military equipment." The exercise is Iran's first naval training drill since May 2010, when the country held its Velayat 89 naval maneuvers in the same area. Velayat 90 is the largest naval exercise the country has ever held.

US will go to war with Iran, Oil and Gold will spike
NEW YORK (Commodity Online): Jim Rickards, author of the hugely successful Currency Wars, believes that Crude Oiland Gold will spike in the near term due to a US-Iran war.
"I say the war has already begun. There’s a lot of sabotage, there have been assassinations, strange things blowing up, rebellion. So there is enormous pressure being put on the Iranian regime from many directions", Rickards said in a King World News interview.

Keiser Report: From Russian Oil with Love (E231)

The President Goes to War
Mises Daily: by John T. Flynn
As I write this, the war in Europe has reached a critical stage for the two great empires, England and France. We know that the overwhelming conviction of the American people is that we should stay out of that war. There are some who would like to help the empires as much as possible without going to war. But they are adamant for not becoming involved.
It is very important, however, to realize the existence of various groups eager for American participation in the war, if it should become evident that our participation is essential to defeating Germany. These people constitute a small minority. They are to be found in certain groups, and everybody recognizes who they are. Some of them are intriguing actively to get us in.

Iran threatens action if US returns to Persian Gulf

What are the major problems facing commodities in 2012?
By Amine Bouchentouf - CommodityOnline.com
As we close the books for 2011 and open the first page of 2012, it’s clear that the new year is shaping up to be a pivotal one for the global economy in general, and commodities markets in particular. In this week’s column, I take a look at the top five factors that will have a big influence on commodity investing.
--European Economic Collapse: One of the biggest issues facing the global economy is the European sovereign debt situation. The eurozone took center stage in 2011 and will continue to play an important role in global economic affairs in 2012. From a macroeconomic perspective, the outcome of the European debt situation will have reverberations in many markets, commodities included.

2012 Economic Scorecard:
The Case for Hope, Despair, and Utter Confusion
By Derek Thompson - TheAtlantic.com
The U.S. stock market woke up to a continental breakfast of strong economic reports this morning showing accelerating growth in U.S. manufacturing, a boomlet in construction spending, and Chinese manufacturing moving back into growth after a scary slip in November. Nobody has the faintest clue whether this news will keep up for 12 months, because experts are horrible prognosticators. But since everybody likes a good prediction, we wanted to create a scorecard to help you be, if not the world's best forecaster, at least one of the least bad guessers out there. Here is your case for optimism, pessimism, and utter uncertainty.

Winning the inflation battle but losing the war
Inflation worsened in 2011 — but inflation hedges didn’t pay
By Mark Hulbert, MarketWatch
CHAPEL HILL, N.C. (MarketWatch) — Winning the battle but losing the war?
One year ago in this space, I reported that the top performing advisers were predicting that inflation in 2011 would emerge victorious in its epic battle with deflation.
They would appear to have been at least partially right. A year ago, the Consumer Price Index’s 12-month rate of change stood at just 1.1%. The comparable rate today is 3.4%, three times greater.

China central-bank chief on yuan, 2012 forecasts
By Hu Shuli and Zhang Jiwei
BEIJING ( Caixin Online ) — Amid global economic uncertainty, People’s Bank of China Gov. Zhou Xiaochuan is one of the world’s most talked-about central bankers.
Zhou attracts as much attention as U.S. Federal Reserve Chairman Ben Bernanke and European Central Bank President Mario Draghi because the world’s financial markets are vitally interested in China’s interest-rate trends, bank deposit reserve ratio adjustments, and yuan-dollar exchange rates.

Every Single Economic Indicator in Spain Looks Disastrous
Hampered by a remarkable collapse of private debt and struggling to sell its public debt on the market, Spain is in an economic free fall
By Derek Thompson - TheAtlantic.com
Before I depress you with some really hideous graphs, here's a story about Spain and Germany -- two lovely European countries, both alike in soccer excellence, both shaped like cheese squares with an edge bitten off -- that are going in opposite directions in the aftermath of the Great Recession.
In the boom years of the 2000s, Spain was riding a real estate and construction bubble, and frugal Germany was still recovering from the fizzle-out of its telecom burst while the country grappled with labor reforms that many accused of slowing down the economy. Looking for a hot bet, German banks bought debt off smaller European countries, which had the effect of inflating their housing bubbles. For much of the decade, Spain was growing twice as fast as Germany.

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Ann Barnhardt:
The Financial System House of Cards
Is Ready to Topple [MP3 - 38:38]
Living on Borrowed Time
Interview: James J Puplava CFP with Ann Barnhardt
Jim welcomes back Ann Barnhardt for another compelling conversation. Going beyond the MF Global collapse, Barnhardt believes that the financial system is at risk, and we are living on borrowed time. She also adds that it’s time to go on strike against the big Wall Street firms.

Worried about Your Accounts
Falling Prey to an MF-Global-Type Scenario?
BY CATHLYN HARRIS - FinancialSense.com
Some wise money placement tips
As the MF Global situation plays out, I continue to get questions from clients and potential clients about the safety of the markets, assets in the markets, brokerage accounts, various banks, etc. While I addressed certain larger issues in my recent piece, "The Logic and Logistics of Market Flight and Repatriation: Taking assets out of the market and putting them back in", I'd like to tackle two of the specific questions I regularly field about the safety of assets in the financial system.
Can My Financial Institution "Borrow" My Assets Like MF Global Did with Their Customers?
Whether or not your financial institution has the ability to use your assets as collateral depends on the type of account you've opened with them, and the agreements you've signed.

The Austrian Theory of Money
Mises Daily: by Murray N. Rothbard
The Austrian theory of money virtually begins and ends with Ludwig von Mises's monumentalTheory of Money and Credit, published in 1912.[1] Mises's fundamental accomplishment was to take the theory of marginal utility, built up by Austrian economists and other marginalists as the explanation for consumer demand and market price, and apply it to the demand for and the value, or the price, of money. No longer did the theory of money need to be separated from the general economic theory of individual action and utility, of supply, demand, and price; no longer did monetary theory have to suffer isolation in a context of "velocities of circulation," "price levels," and "equations of exchange."

MF Global Sold Assets to Goldman
While It Was Looting Their Customer Accounts
JESSE'S CAFÉ AMÉRICAIN
It turns out that MF Global sold hundred of millions in assets to Goldman in the last two business days before its bankruptcy. It is not clear that MF Global actually received the payment for the sale, or if the funds were held by their clearing agent and banker, JP Morgan, who knew that they were going to be bankrupt.
That revolving line of credit at JPM of $1.2 Billion is about the size of the missing customer funds.
I wonder if JPM withheld payment on the sale of Goldman assets, and took customer assets as collateral for the credit line. As MF Global's banker they were at the center of most if not all of these transactions.

MF Global sold assets to Goldman before collapse
By Lauren Tara LaCapra and Matthew Goldstein | Reuters
(Reuters) - MF Global unloaded hundreds of millions of dollars' worth of securities to Goldman Sachsin the days leading up to its collapse, according to two former MF Global employees with direct knowledge of the transactions. But it did not immediately receive payment from its clearing firm and lender, JPMorgan Chase & Co , one of the sources said.
The sale of securities to Goldman occurred on October 27, just days before MF Global Holdings Ltdfiled for bankruptcy on October 31, the ex-employees said. One of the employees said the transaction was cleared with JPMorgan Chase.

The First 12 Hours after the US Dollar Collapse

Obama and Geithner: Government, Enron-Style
By Matt Taibbi - RollingStone.com
Strongly recommend this piece at the Huffington Post by Jeff Connaughton, a former aide to Senator Ted Kaufman. Jeff is one of the smartest guys on the Hill and is particularly strong on issues surrounding Wall Street and the regulatory system. In this piece, he takes apart the oft-stated mantra that what Wall Street firms did during and after the crisis was maybe unethical, but not illegal.
He takes particular aim at Barack Obama, who recently tossed that line out on 60 Minutes in what I thought was one of the real low moments of his presidency. Here’s Jeff’s take:

Speaking in Kansas on December 6, [Obama] said, "Too often, we've seen Wall Street firms violating major anti-fraud laws because the penalties are too weak and there's no price for being a repeat offender." Just five days later on 60 Minutes, he said, "Some of the least ethical behavior on Wall Street wasn't illegal." Which is it? Have there been no prosecutions because Wall Street acted legally (albeit unethically)? Or did Wall Street repeatedly violate major anti-fraud laws (and should thus find itself in the dock)?

China, 2012 and Von Mises’ Crack-Up Boom
BY DARRYL SCHOON - FinancialSense.com

The credit boom is built on the sands of banknotes and deposits. It must collapse… If the credit expansion is not stopped in time, the boom turns into the crack-up boom; the flight into real values begins, and the whole monetary system founders. Ludwig von Mises, Human Action, 1949

I first attended the Canton Trade Fair in October 1976. All Chinese men and women were dressed in blue shirts and blue pants, bicycles were China’s main mode of transportation, Chairman Mao had just died and China’s mantra, “We will continue to support the policies of Chairman Mao Tse-Tung and criticize the policies of Deng Xiao-Ping”, was heard everywhere.

Bank of America severing some small-business credit lines
Bank of America is demanding that some small-business customers pay off their credit line balances all at once instead of making monthly payments.
By E. Scott Reckard, Los Angeles Times
Bank of America Corp., under pressure to raise capital and cut risks, is severing lines of credit to some small-business owners who have used them to stay afloat.
The Charlotte, N.C., bank is demanding that these customers pay off their credit line balances all at once instead of making monthly payments. If they can't pay in full, they are being offered new repayment plans for as long as five years, but with far higher interest rates than their original credit lines had.

Wall Street Journal report says
Kodak might file for bankruptcy in coming weeks
AP - WashingtonPost.com
ROCHESTER, N.Y. — An uncomfortable suspicion that an icon of American business may have no future pushed investors to dump stock in Eastman Kodak Co. Wednesday.
The ailing photography pioneer’s shares fell to a new all-time low after the Wall Street Journal reported that Kodak is preparing for a Chapter 11 filing "in the coming weeks" should it fail to sell a trove of 1,100 digital-imaging patents.
Analysts have said the patents could fetch $2 billion to $3 billion, but no takers have emerged since Kodak started shopping them around in July.

Kodak Teeters on the Brink
By MIKE SPECTOR And DANA MATTIOLI - WSJ.com
Eastman Kodak Co. is preparing to seek bankruptcy protection in the coming weeks, people familiar with the matter said, a move that would cap a stunning comedown for a company that once ranked among America's corporate titans.
The 131-year-old company is still making last-ditch efforts to sell off some of its patent portfolio and could avoid Chapter 11 if it succeeds, one of the people said. But the company has started making preparations for a filing in case those efforts fail, including talking to banks about some $1 billion in financing to keep it afloat during bankruptcy proceedings, the people said.

Gerald Celente - Happy New Year 2012.

A 2012 Conservative Case for America's Future
By Ken Blackwell, co-authored by Ken Klukowski - PatriotPost.us
The United States is at a fork in the road regarding which way we will go as a people. The 2012 election could be the most important in our lifetime, and conservative leaders have reached a consensus on how to channel the energy and concerns of the American people to realize historic change this year.
The status quo will not survive the year. Our debt and spending have reached catastrophic proportions in the context of global financial difficulties and political upheaval. Consequently, by the end of 2012, America will either have taken a decisive step toward socialistic collectivism in the name of "equality" and "social justice," where businesses and owners are punitively taxed to "pay their fair share," or America will take a major step in the direction of returning to our Founders' constitutional government, restoring the rule of law, federalism, free enterprise, and individual initiative and responsibility.

Obama defies Congress with 'recess' picks
Nominations could provoke constitutional fight
By Stephen Dinan and Susan Crabtree - The Washington Times
Pushing the limits of his recess appointment powers, President Obama on Wednesday bypassed the Senate to install three members of the National Labor Relations Board and a director for the controversial new Consumer Financial Protection Bureau - moves Republicans said amounted to unconstitutional power grabs.
Mr. Obama said the appointments, which he previewed during a campaign-style speech in Ohio, were necessary because Senate Republicans have blocked him at every turn. But in making the move, he rejected three precedents, including two in which he played a part, that would have blocked the appointments.

Gloom, Doom, and Optimism
Mises Daily: by Mike Scully
Marc Faber is a market analyst and publisher of the "Gloom, Boom and Doom Report" newsletter. As you may have gathered from that title, he's rather pessimistic about the economy. (He's also been very accurate concerning economic trends over his career.) But he really dropped jaws recently when he made the following statement on CNBC:
"I am a great optimist in life; otherwise I would commit suicide in view of the kind of governments we have nowadays."
Hyperbolic suicide comments aside, it brings up an interesting irony that I have been noticing for a while: many of the most bearish economic forecasters describe themselves as optimists in their day-to-day lives. I consider myself extremely optimistic, but my views on the economy are dire at best. The fact that we optimists are so pessimistic about the economy should cause you to take notice and ask if maybe there is something to all this gloom and doom after all.

Peter Schiff Predictions For 2012!

Koch brothers not fooling America
Dave Starr, LasVegasSun.com
In his recent letter, Joseph Schillmoeller got one thing right: Americans aren’t being fooled anymore. The rest of his letter misses. The Keystone XL Pipeline has Big Oil and union support but is an environmental disaster (think of fracking and the Gulf of Mexico disaster). A huge water supply lies under the proposed pipeline, and the floor of the Gulf is dead forever. Nothing will ever live there again.
Saying that the majority of union dues goes to Democratic candidates is absurd. All private sector unions together will not donate anything close to the Koch brothers’ payments to their Republican puppets through Karl Rove.

Credit card interest rates start new year near record highs
By Tiffany Hsu - LATimes.com
New year, new credit card? With interest rates averaging near record highs at more than 15%, it’s going to cost you.
A report Wednesday from CreditCards.com has rates averaging 15.14% after peaking at 15.22% in mid-December. And a survey from the card-tracker site shows late payment penalties are becoming more expensive.
Card holders with bad credit are shelling out an average 24.96% APR, while rates for reward, cash back, airline and student cards are on a six-month upward trend.

'Time cloak' hid event in experiment, physicists say
By David Brown - WashingtonPost.com
A team of physicists at Cornell University has created a wrinkle in time. Actually, it’s more like a teeny tiny moth hole in time. Inside it things can occur that are entirely undetectable, at least to ordinary observers. It’s as if they never happened.
This phenomenon, known as "temporal cloaking," is the latest addition to a world that once existed only in children’s literature and science fiction — a place where objects are invisible and events are unrecorded.

TSA Workers Want to Arrest You
Katherine Mangu-Ward - Reason.com
You know what sucks? Not being able to arrest people who piss you off when you're on the job. Who wouldn't want to have the power to slap cuffs on the grumpy people they deal with at work? But no. When I want someone arrested, I have to call the cops and wait around until they show up to do the arresting for me. Lame.
The employees of the Transportation Security Administration (TSA) feel the same way. In an article for In These Times, writer Mike Elk (who was fired from the Huffington Post last year for letting union organizers borrow his press credential in order to disrupt a conference of mortgage bankers) describes the work of the nation's 44,000 TSA screeners as one of "the most dangerous jobs in America," citing the 30 (30!) guns a week they pluck from the nation's baggage.

Lindsey Williams - Jeff Rense Radio - 02 Jan 2012

Boeing to close historic aerospace facility in Kansas
The company's decision may augur more cuts in the defense industry as federal spending on weapons procurement shrinks in the coming decade.
By W.J. Hennigan, Los Angeles Times
As aerospace workers in Southern California and across the nation brace for protracted cuts in Pentagon spending, Boeing Co. announced plans to close a historic facility in Wichita, Kan., where the company has built and modified military aircraft since the 1920s.
The decision Wednesday was seen as a precursor to more cutbacks in the defense industry, as Congress and the Obama administration move to tighten federal spending on weapons procurement in the coming decade.

BOEING TO CLOSE WICHITA PLANT BY 2013
Wichita facility’s closing will affect 2,160 Boeing workers
By MOLLY McMILLIN - The Wichita Eagle
WICHITA — Boeing said layoffs won’t begin until the second half of this year as it plans to close its Wichita facility by the end of 2013 and move the work to other sites, officials said. Closing the facility will affect 2,160 workers in Wichita and will be a two-year process. It plans to eventually divest of its facilities here. Engineering and program management work will move to Oklahoma City, while modification work will be moved to San Antonio. Work on the KC-46 tanker, meanwhile, will go to the Puget Sound area, officials said. Jobs will be offered to some Wichita employees to transfer, but not to everyone.

Hawker-Beechcraft Denied Big Air Force Contract in Favor of Brazilian Company With Soros Connections
By Gary P Jackson - A Time For Choosing
Here’s a little something that caught my eye today. It seems after investing around $100 million in this project, Hawker-Beechcraft has been excluded from a contract, worth almost $1 billion, to build a new light air support plane.
What intrigues me is the Brazilian company Embraer, the likely contract winner, is currently under investigation by the U.S. Securities and Exchange Commission, and the Justice Department, for possible violations of the US Foreign Corrupt Practices Act.
According to Financial Times, Embraer is "venturing into the defense industry" and "is one of a select few Brazilian companies that has managed to break out of the Latin American market and compete on a global scale"

Obama Administration
Sends Weapons Contract
to Foreign Company with Ties to Iran
What the heck? It's only our national security.
by Ben Howe - Monday, November 21st - RedState.com
Late Thursday night, American company Hawker Beechcraft was informed by the U.S. Air Force that they were not going to be allowed to compete for an American military aircraft contract.

The Air Force has notified Hawker Beechcraft Corp. that its Beechcraft AT-6 has been excluded from competition to build a light attack aircraft, a contract worth nearly $1 billion, the company said.

The company had been working with the Air Force for two years and spent over $100 million to ensure compliance with the requirements for the plane and says the craft (Beechcraft AT-6) met all requirements as shown through a demonstration actually led by the Air National Guard.

Hawker requests GAO review of Air Force deal
By Molly McMillin and Jerry Siebenmark - Kansas.com
WICHITA — Hawker Beechcraft said Tuesday that it is requesting the Government Accountability Office review the Air Force’s move to exclude it from the bidding process for a Light Air Support aircraft. "(Monday) we received notification that the United States Air Force formally denied our second request for a debriefing," the company said in a statement. "As a result, we still have no information on why the Beechcraft AT-6 was excluded from the Light Air Support competition." Sen. Jerry Moran said Tuesday that the Kansas Congressional delegation has insisted that the Air Force meet with Hawker Beechcraft on the reasons it told the company it isn’t eligible to bid on the $1 billion contract. It’s asking the Secretary of the Air Force to have a conversation about those reasons.

Exclusive Excerpt: The Operators by Michael Hastings
McChrystal, Petraeus
and the inside story of America's war in Afghanistan
By MICHAEL HASTINGS - RollingStone.com
In April 2010, Rolling Stone contributing editor Michael Hastings spent a month with Gen. Stanley McChrystal in Europe and Afghanistan, reporting on a profile of the supreme commander of all NATO forces in what had become America’s longest-running war. To Hastings’ astonishment, McChrystal and staff had plenty to say about the White House and its handling of the war – none of it complimentary, much of it contemptuous, and almost all of it on the record. Hastings reported their unvarnished comments in "The Runaway General," an explosive and award-winning Rolling Stone article that unleashed a global media storm and led President Obama to order McChrystal back to Washington, where he fired the general on the spot.

Obama's Robot Army
No president has ever relied so extensively on the stealthy, secret killing of individuals on the battlefield.
By Ta-Nehisi Coates - TheAtlantic.com
There's a lot to chew on in Greg Miller's piece on the expansion of the drone program under Obama:

In the space of three years, the administration has built an extensive apparatus for using drones to carry out targeted killings of suspected terrorists and stealth surveillance of other adversaries. The apparatus involves dozens of secret facilities, including two operational hubs on the East Coast, virtual Air Force­ ­cockpits in the Southwest and clandestine bases in at least six countries on two continents.
Other commanders in chief have presided over wars with far higher casualty counts. But no president has ever relied so extensively on the secret killing of individuals to advance the nation's security goals. The rapid expansion of the drone program has blurred long-standing boundaries between the CIA and the military.

cnn - barack obama:
"ask bin laden about appeasement" - like a boss

Iran strives to play spoiler in Afghanistan
By Ernesto Londoño - WashingtonPost.com
KABUL — Worried that U.S. troops could stay in Afghanistan beyond 2014, Iran is mounting an aggressive campaign to fuel anti-American sentiment here and convince Afghan leaders that a robust, long-term security partnership with Washington would be counterproductive, Afghan officials and analysts say.
The Iranian initiative involves cultivating closer relations with the Taliban, funding politicians and media outlets, and expanding cultural ties with its eastern neighbor. Although the effort has been underway for years, Iran has been moving with increased vigor in recent months because the United States and Afghanistan are negotiating a security agreement that could set the parameters for a U.S. troop presence here after 2014.

Election...

Mitt Romney "I Love Our Freedom! I Love Our Constitution! I Love Our Lands! I Love Our People!"

Rick Santorum "People Ask Me What Motivates Me? I Say The Dignity Of Every Human Life!"

Ron Paul "Let's Go Back To This VERY DANGEROUS Idea Let's Obey The Constitution!"

After Iowa, verbal barbs fly among GOP candidates
By Seth McLaughlin - The Washington Times
CONCORD, N.H. — Rick Santorum sported a post-caucus glow Wednesday, while Newt Gingrichsharpened his attacks on his biggest foe. Jon Huntsman Jr. looked to wiggle into the mix, andRon Paul took the day off, kind of - all just hours after Mitt Romney’s photo-finish victory in Tuesday’s Iowa caucuses.
Political attention now has turned here, to Mr. Romney’s political backyard of New Hampshire, and his Iowa victory combined with his consistently large lead in state polls has helped widen the bull’s-eye on his back.

Money in Politics Worse Than Ever in Election Year Jan 4th 2012

Palin to Cavuto:
If Candidates Don’t Get Passionate
about Reforms and Solutions
Someone Will Enter the Race
By Gary P Jackson
Sarah Palin appeared on Fox Business News Tuesday night and talked with Neil Cavuto. Pretty much what you expect , until the end. When asked about the chance of her entering the presidential race, she get’s pretty fired up. You can tell that, like many of us, she’s frustrated with these candidates. Frustrated they aren’t talking reform and offering real solutions.
It should be noted that Bill Kristol, who recently made a plea for those who declined to run to reconsider, was on Fox News later naming Sarah as someone who should.

Neil and Sarah Jan. 03, 2012

Voter Suppression:
The Dirty, Low, Fithy Tricks
of American For 'Prosperity'
& The Koch Brothers

- - - - - - - - - - - - - - - -
Archived Page Link
- - - - - - - - - - - - - - - -

Wednesday 01.04.2012

Romney, With a Tight Win, Goes to N.H.
By KATHARINE Q. SEELYE and JEFF ZELENY - NYTimes.com
MANCHESTER, N.H. — The quest for the Republican presidential nomination moved here to New Hampshire on Wednesday, after Mitt Romney eked out a win of only eight votes against the surging candidacy of Rick Santorum the night before in Iowa caucuses. Both men were arriving here on Wednesday, with Mr. Romney, the favorite in the primary just six days away, hoping for a commanding victory.

Iowa Election Results

Iowa caucus results:
Santorum, Romney in virtual tie, with Ron Paul in third
By Karen Tumulty - WashingtonPost.com
CEDAR FALLS, Iowa — Three sharply different Republican candidates were on course to split the bulk of votes in Tuesday’s Iowa caucuses as a chaotic campaign season culminated with the first real ballots cast.
With 96 percent of precincts reporting at 11:40 p.m. Eastern, former senator Rick Santorum(Pa.) was in a virtual tie with former Massachusetts governor Mitt Romney, leading him by just 79 votes. Both of them hovered around 24.6 percent of the total, with Rep. Ron Paul(Tex.) close behind at 21 points. It seemed possible that this year’s winner — whoever it turns out to be — would finish with the lowest percentage total of any GOP winner in Iowa’s modern history, sinking below Bob Dole’s 26 percent in 1996.

Iowans press candidates
on same issues that concern Republicans across country
By Stephen Dinan - The Washington Times
DES MOINES, Iowa — Iowa’s caucuses may not always pick the eventual presidential nominee, but voters this year did something more helpful to the process: They asked the kinds of tough questions about the economy and government spending that are on the minds of Republicans across the country who still have yet to vote.
In what voters described as the most wide-open, freewheeling caucuses in history, Iowa kicked off the 2012 election season Tuesday night and boosted a trio of Republicans — former Massachusetts Gov. Mitt Romney, former Sen. Rick Santorum of Pennsylvania and Rep. Ron Paulof Texas — into the top tier heading forward.

Ron Paul’s Long Game
The libertarian’s looking good in Iowa,
and he won’t just be a one-state wonder.
By David Weigel - Slate.com
CEDAR FALLS, Iowa—"We’re already done with Iowa," Eric tells me after Ron Paul’s latest speech. "We were done weeks ago."
What does he mean? He opens his MacBook Air and clicks on a spreadsheet with information about the 3.5 million glossy campaign documents he’s printing up for the "Ron Paul Super Brochure Precinct Blast." Eric has started to fill orders for people in later primary states—6,849 for a volunteer in South Carolina, a few hundred for someone in Florida, where Eric lives. (Eric doesn’t want to give a last name, as this would "take credit" away from project funder Curt Schultz.) Order a batch and you get your name printed on the back, in case you want to mail them to voters.
"It’s not hidden, like a Super PAC," says Eric. "It’s all transparent."

Is Privacy Act Violated
as Voting War’s GOP Hit Man is Fed
Leaks By Justice Department Mole?
Will the DOJ investigate leaks in attacks on Voting Section employees and major voting rights decisions?
By Steven Rosenfeld - AlterNet.org
A crusading GOP critic of the Obama Justice Department’s Voting Section, Hans von Spakovsky, has admitted to having Department sources that are leaking apparently confidential and highly personal information that he is using to viciously attack Voting Section staff and to smear the Department at large.
Leaking such information—including details from ongoing Inspector General inquiries into a previous media leak and detailing the behavior of a DOJ employee related to that internal investigation—would not only violate DOJ confidentiality rules, but also could violate the federal Privacy Act, which governs how agencies are to control records.

Iowa GOP explains moving vote tabulation away from HQ
By JONATHAN MARTIN - Politico.com
Iowa GOP chair Matt Strawn was largely mum when I asked yesterday about a tip I got that the state party was moving the vote-tabulation away from their headquarters to an "undisclosed location."
But after the Iowa GOP HQ was flooded today with questions from Ron Paul backers and conspiracy-minded types about why the Republicans were compiling the votes from the state's 99 counties in private, the state party's executive director confirmed that they were going off-site and said it was only to avoid a sabotage.

Great (if Hypocritical) News!
Iowa GOP Caucuses Will Vote
on Publicly Hand-Counted Paper Ballots!
And no Photo ID is required to register or vote!...
By Brad Friedman
Votes in next Tuesday's Republican caucuses in Iowa will be cast on paper ballots and hand counted publicly at each and every caucus site, according to a report late this week from Politico's Jonathan Martin. In other words, Republicans will be relying on"Democracy's Gold Standard" when it comes to casting and counting ballots in their own election, in which they set all of the rules, even if they will not allow the same standards to be applied to elections in which Democrats will take part.
Martin's story should come as great news for Election Integrity advocates and, in particular, Ron Paul supporters who have very good reason to be concerned about the process after witnessing --- first-hand and on video-tape --- blatant voter fraud carried out by Mitt Romney supporters in years past. The news is also welcome in light of a recent report suggesting the GOP would be counting votes in secret to avoid a purported "threat" by the hacktivist group Anonymous to disrupt next week's caucuses.

IOWA: ISSUES OF INTEGRITY
FOR THE IOWA REPUBLICAN CAUCUS
By Bev Harris - Black Box Voting Forums
Brad Friedman at Bradblog.com reports on some key procedures in the 2012 Iowa Republican caucus. At issue is just how transparent and public the process is, and whether there are any holes in the cheese. Fewer holes than 2008, it seems. A bit of diligence on the part of caucus participants will be needed (see end of this article for what to do).
There is also some consternation from concerned citizens about a recent Politico.com story, which reports that the Iowa statewide caucus counting will be moved to an undisclosed location, its author chiding those who question the transparency behind such a move as "conspiracy minded types." To be clear about this, insisting on transparency is a necessary and patriotic element of running any public election, and ridiculing public citizens who examine transparency is kind of embarrassing. For the reporter. Not the citizens.

Evidence of Massive REPUBLICAN VOTER Fraud
by Melvin Junko - DailyKos.com
The larger question being ignored in the Newt didn't qualify for the Va primary story is the OBVIOUS MASSIVE Voter Fraud that went into his failed effort. The process to qualify for the Va. Primary run off is to secure merely 10,000 signatures of registered Va voters.
It does not seem inconceivable that a candidate with a LONG history of "ethical lapses" would resort to such tactics.
It has been reported that Newt submitted roughly 11,000 plus signatures and the election officials were unable to confirm at least 10,000 of these were valid qualifying voters (we don't yet know how many actual signatures were determined to be valid or false).

US Closes 2011 With Record $15.22 Trillion In Debt, Officially At 100.3% Debt/GDP, $14 Billion From Breaching Debt Ceiling
Submitted by Tyler Durden - ZeroHedge.com
While not news to Zero Hedge readers who knew about the final debt settlement of US debt about 10 days ahead of schedule, it is now official: according to the US Treasury, America has closed the books on 2011 with debt at an all time record$15,222,940,045,451.09. And, as was observed here first in all of the press, US debt toGDP is now officially over 100%, or 100.3% to be specific, a fact which the US government decided to delay exposing until the very end of the calendar year. We wonder, rhetorically, just how prominent of a talking point this historic event will be in any upcoming GOP primary debates. And yes, technically this number is greater than the debt ceiling but it excludes various accounting gimmicks. When accounting for those, the US has a debt ceiling buffer of... $14 billion, or one third the size of a typical bond auction.

The Debt Bomb:
7,600,000,000,000 Dollars Of Debt
Must Be Rolled Over In 2012
EndOfTheAmericanDream.com
When it comes to government debt, it is not just new debt that is the problem. Every single year, governments around the world must "roll over" gigantic mountains of debt that come due. That means that the actual borrowing that takes place each year is far greater than the yearly budget deficits that you see talked about on television. In 2012, a total of 7,600,000,000,000 dollars of debt must be rolled over by the G-7 nations, Brazil, Russia, India and China. When you add in interest payments, that number rises to over $8 trillion. And that does not even include any new borrowing that all of those nations will do in 2012. This is a debt bomb that could devastate the entire global economy at any time. Everything will be fine as long as global lenders are willing to lend these countries gigantic mountains of very cheap money. But if that changes, and there are already a multitude of signs that a massive global credit crunch has begun, it will mean a complete and total financial nightmare for the entire world.

World’s Biggest Economies
Face $7.6 Trillion Bond Tab as Rally Seen Fading
By Keith Jenkins and Anchalee Worrachate - Bloomberg.com
Governments of the world’s leading economies have more than $7.6 trillion of debt maturing this year, with most facing a rise in borrowing costs.
Led by Japan’s $3 trillion and the U.S.’s $2.8 trillion, the amount coming due for the Group of Seven nations and Brazil, Russia, India and China is up from $7.4 trillion at this time last year, according to data compiled by Bloomberg. Ten-year bond yields will be higher by year-end for at least seven of the countries, forecasts show.
Investors may demand higher compensation to lend to countries that struggle to finance increasing debt burdens as the global economy slows, surveys show. The International Monetary Fund cut its forecast for growth this year to 4 percent from a prior estimate of 4.5 percent as Europe’s debt crisis spreads, the U.S. struggles to reduce a budget deficit exceeding $1 trillion and China’s property market cools.

On The World's Reserve Currency: What's Past Is Epilogue
Submitted by Tyler Durden - ZeroHedge.com
Simply put, "it does not last for ever" should be ringing in the ears of every investor in the world with more than a few millisecond return horizon. And neither do any and all chartalist conventions which rely on the articial construct of reserve permanence, for one simple reason - being artificial, means the theory is flawed from the beginning. But it is JPMorgan's Michael Cembalest who frames it the best, "I am reminded of the following remark from late MIT economist Rudiger Dornbusch: 'Crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought.'"

Gold Rallies Most in 10 Weeks on Iran, Dollar
By Debarati Roy and Nicholas Larkin - Bloomberg.com
Gold futures jumped the most in 10 weeks on demand for a haven following a report that Iran produced its first nuclear-fuel rod. Silver surged the most in five months as the dollar’s decline spurred a commodity rally.
A domestically-made rod was inserted into the core of Tehran’s atomic-research reactor, the Iranian Students News Agency said yesterday. The dollar fell against a basket of currencies as global manufacturing expanded, spurring demand for raw materials perceived as riskier assets. Blackstone Group LP’s Byron Wien, who correctly predicted last year’s gain in gold, said the metal will rally 15 percent in 2012 to $1,800 an ounce.

Could gold repeat another double digit rise in 2012?
By Debbie Carlson
Like a prizefighter who has taken a few upper cut blows, Goldmight be a bit woozy, but the metal’s longer-term uptrend is hardly on the ropes. As in many financial sectors, gold’s price direction has been guided by headlines, particularly out of Europe on the sovereign debt situation, and the volatility caused by swiftly changing news has made many markets a bit punch-drunk.
The December price break for gold came as several events aligned. First, the market was never able to retest its all-time nominal high in August of $1,923.70 an ounce. Second, gold was one of the few star performers this year and when equity and other markets soured, money managers needed to raise cash to meet margin calls and shore up positions elsewhere. Third, with investors spooked by the continued inability for eurozone leaders to convincingly shore up their union, these investors sought safety in the most liquid vehicle available – cash – again pulling profits from gold.

Who holds the world's biggest gold reserves?
NEW YORK (Commodity Online): Following uncertainty in the equity markets and the global economy, countries and organizations believe that Gold is a safe haven and investing in gold is a sure ticket to preserving hard-earned wealth. A store of value and a safe one at that, gold as a commodity has been appreciating and giving investors ample returns barring a few instances.
In fact, the biggest institutional holders of gold—central banks, international entities and governments—are believed to account for approximately 16.5 percent of the world's gold, holding about 30,700 tons.

Gold and Silver gain
on Iran nuclear development
and Eurozone weakness
NEW YORK/MUMBAI (Commodity Online): Precious metals are trading up on Tuesday after reports of Iran's nuclear development made investors put money in Gold and silver. At the COMEX, January Gold contract is trading up by $13.2 at $1579/oz while Silver January contract gained $0.245 to trade at $28.12/oz as of 9:54:25 PM CT.
MCX Gold February contract is trading at Rs 27582 as of 12:15 PM IST, a gain of 0.72% while MCX Silver March contract is up by 1.31% at Rs 52000.

Gold Daily and Silver Weekly Charts -
Big Relief Rally From the
End of Year Mark-To-Market Boogie Woogie
JESSE'S CAFÉ AMÉRICAIN
It appears that the theory that the big shorts were slamming down gold and silver into the year end *might* be valid, given the huge rally today.
But it is too soon to say for sure. I have drawn a short term downtrend line on the gold chart that is a 'must take' for the bulls.
Non-Farm Payrolls report on Friday and the Euro-whiz kids meet again on the 9th to puzzle through their Gordian knot of a currency and political system.

A Palestinian leader calls for the Arab world to rise up and stop Israel from Judaizing the city of Jerusalem
By Jimmy DeYoung - ProphecyToday.com
The PM of Hamas, an Islamic terror organization located in the Gaza Strip, has made an urgent call for the international Arab and Moslem world to stop what he called Israel's Judaization of Jerusalem and all the attacks by the Jewish state on the Moslem community in Israel.
Ismail Haniyeh, the Hamas PM, during a recent visit to Cairo, Egypt slammed Israel for the ethnic cleansing of Jerusalem and a campaign against Moslem symbols.
The Hamas PM says Jerusalem is the future capital of a Palestinian state and the Moslem world must do whatever is necessary to stop the Judaization of Jerusalem by the Israelis.

Iran sought to broker Syria deal
between Assad, Muslim Brotherhood
By Ben Birnbaum - The Washington Times
ISTANBUL — A leader of Syria's Muslim Brotherhood says Iran has sought to coax the Islamist group’s support for President Bashar Assad in exchange for four high-ranking positions in the Syrian government.
Mohammed Farouk Tayfour, the top political leader in Syria's Muslim Brotherhood, told The Washington Times on Tuesday that Iran’s supreme leader — Ayatollah Ali Khamenei — sent three emissaries to Istanbul in late October to try to broker the deal.

Tehran warns U.S. to stay out of Gulf
Tough talk seen as sanctions backlash
By Rowan Scarborough-The Washington Times
Iran’s stepped-up bellicosity, including a warning Tuesday that a U.S. aircraft carrier should not return to the Persian Gulf, is a reaction to increased talk in the United States and Israel of a strike on its nuclear sites, and of the West adding economic sanctions on its already struggling economy, analysts say.
The Pentagon responded to Iran’s tough talk by vowing that its warships are in the Gulf to stay and will take steps to ensure the commercial oil shipping continues to sail through the Strait of Hormuz. More than one-sixth of the world’s crude oil moves through the strategic sea lane at the mouth of the Gulf.

Iran defiant amid appeals for European sanctions
USAToday.com
DUBAI, United Arab Emirates (AP) – Iran closed out naval war games in the Gulf on Tuesday much the way they began last month: striking a tone of military defiance while Western powers rallied behind tougher oil and financial sanctions as a crippling tool against Tehran's nuclear program.
The standoff atmosphere — less than a week after Iran warned it could block one of the world's key oil tanker sea lanes in response to economic pressures — appeared to deepen further with an Iranian general suggesting a U.S. aircraft carrier is not welcome to return to the Gulf.

U.S. to Iran: Warships to remain in Persian Gulf
WASHINGTON (AP) – The Obama administration on Tuesday brushed aside Iran's warning to keep U.S. aircraft carriers out of the Gulf, dismissing its threats as a consequence of hard-hitting American sanctions on the Iranian economy.
Provoking a hostile start to what could prove a pivotal year for Iran, the country's army chief said American vessels were unwelcome in the Gulf, the strategic waterway that carries to market much of the oil pumped in the Middle East.
The Islamic republic also has warned of blocking one of the world's key tanker lanes, the Strait of Hormuz, in response to new, stronger U.S. economic penalties on Iran over its disputed nuclear enrichment program. Iranian Gen. Ataollah Salehi's warning about the Gulf came just three days after President Barack Obamasigned into law new sanctions targeting Iran's Central Bank and its ability to sell petroleum abroad.

Pentagon rejects threat from Iran,
says it will continue scheduled movements
of U.S. carriers on Persian Gulf
By Heather Langan and Viola Gienger - WashingtonPost.com
Jan. 3 (Bloomberg) -- The head of Iran’s army warned the U.S. against sending an aircraft carrier back to the Persian Gulf after the USS John C. Stennis left the area a week ago, a threat rejected by the Pentagon.
"We usually don’t repeat our warning, and we warn only once," Ataollah Salehi was cited as saying by the state-run Fars news agency. "We recommend and emphasize to the American carrier not to return to the Persian Gulf."
The Stennis, which Iran said it spotted during naval exercises, passed eastward through the Strait of Hormuz on Dec. 27 on a routine voyage and was operating in the northern Arabian Sea, according to the U.S. 5th Fleet, which has a base in Bahrain.

2012 Predictions!
Published by Ian R. Campbell - StockResearchPortalBlog.com
Good Morning and A Very Happy New Year!
At the beginning of each year I have been bold enough to make predictions, both economic and societal, as to what I think will or may transpire in the coming year. This year I have divided my 2012 predictions by what I see as particularly important countries or geographic areas. I then have followed those country/area forecasts with some general comments on the financial markets, gold, and silver. While one might argue that Canada does not qualify in the overall scheme of the world’s economy and money markets as "particularly important", as a Canadian, I have included a few predictions for Canada.

Chinese Premier Wen Jiabao warns of 'difficult' start to 2012
China's Premier Wen Jiabao has warned of a difficult start to 2012, amid concerns over a potential slowdown in the world's second largest economy.
Telegraph.co.uk
Mr Wen also reiterated pledges to expand domestic demand as authorities try to ward off the effects of crises in the US and Europe - key markets for China's export-dependent economy.
"The first quarter of the year may be quite difficult," Mr Wen said, according to a statement by the State Council, China's cabinet.
"We are now in a situation where pressure from an economic downturn and high prices both exist," he said.
Mr Wen added that slowing external demand and the rising cost of doing business domestically further complicated the situation when compared with the financial crisis in 2008.

Hu Says West Is Trying to Divide China
by Using Ideology, Cultural Weapons
By Bloomberg News -
The West is using cultural means to divide China (PRCH), which needs to be alert to this threat, President Hu Jintao said in a Communist Party magazine.
"International forces are trying to Westernize and divide us by using ideology and culture," Hu wrote in an article in Qiushi. "We need to realize this and be alert to this danger."
Many countries, especially Western powers, are attempting to expand their influence through cultural hegemony, and China must deepen and promote its own values of "socialism with Chinese characteristics," Hu wrote in the article, which was published on the government’s website on Jan 1. China needs to strengthen its cultural values as it faces possible challenges from the West, he said.

Why Spain’s New Government is Drinking Austerity Kool-Aid and How This Threatens the Global Economy
European elites push economic myths that benefit the rich and screw the rest. Spain's program means even higher public deficits, fewer jobs, and slowed growth.
By Marshall Auerback - AlterNet.org
Spain's new government said late last month that this year's budget deficit would be much larger than expected and announced a slew of surprise tax hikes and wage freezes that could drag the country back to the center of the eurozone debt crisis. The government plans to enact public spending cuts of 8.9 billion euros ($11.5 billion) and tax hikes aimed at bringing in an additional 6 billion euros a year to tackle the shortfall. Given what has happened to Greece, and now Italy, it is almost certain that this will have the opposite impact of that which the Spanish government wants: there will be HIGHER public deficits at the end of the day, as the cuts curtail economic growth even further.

Greece 'out of euro' if bail-out fails
Greece will crash out of the eurozone unless it can agree the terms of a €130bn (£108bn) international bail-out agreement an Athens official has warned, signalling the start of another tense countdown for European leaders to avert a default.
By Louise Armitstead - Telegraph.co.uk
As European bond markets strained ahead of a vital round of debt auctions, Pantelis Kapsis, a government spokesman, said: "The bail-out agreement needs to be signed otherwise we will be out of the markets, out of the euro. The situation will be much worse."
Greece is struggling to push through tough austerity measures needed to secure the second bail-out. International officials preparing to conduct a financial inspection in Athens that will decide the terms of the rescue package that was agreed in principle in October. Greece is also racing to clinch a deal with the private holders of its sovereign bonds. Both deals have to be secured if Greece is to avoid defaulting at a major bond redemption in March.

Greece: we could exit euro in three months
New Greek government says creditors and lending troika must agree bailout terms within weeks otherwise 'we are out of the markets'
By Heather Stewart - Guardian.co.uk
The Greek government has stepped up the pressure on its eurozone paymasters by warning that unless a new bailout for the recession-hit country is agreed within the next three months it will be forced out of the single currency.
Pantelis Kapsis, a spokesman for the new coalition government led by former central bank chief Lucas Papademos, said negotiations with the "troika" of the International Monetary Fund, Brussels and the European Central Bank over the coming weeks would "determine everything".

ECB names Peter Praet as economics chief
Mario Draghi has risked provoking anger in Berlin after appointing a Belgian to head up the economics division of the European Central Bank (ECB), overlooking the German candidate for the first time.
By Louise Armitstead - Telegraph.co.uk
The Italian boss of the ECB named Peter Praet as the new head of economics, defying calls from Berlin that the tradition of a German holding the post to be upheld.
Mr Praet, 62, who joined the ECB's six-member board in June last year, replaces Juergen Stark, who resigned in September in apparent protest against the ECB's sovereign bond buying policy. The Belgian, who was formerly a board member of the Belgian central bank and is a specialist in financial regulation, will be the first non-German to hold the position since the ECB was founded in 1988.

US Federal Reserve to update public on interest rates
The Federal Reserve will start updating the public four times a year on how long it plans to keep short-term interest rates at record lows, according to written records from its December policy meeting.
AP - Telegraph.co.uk
The first forecast will be included in the central bank's economic projections after its January 24-25 meeting, the records, or minutes, said.
The change marks a significant shift in the Fed's communication strategy. It could help assure investors, companies and consumers that rates won't rise before a specific time. This might help lower long-term yields further - in effect providing a kind of stimulus.
The Fed has previously said that it plans to keep its key short-term rate near zero until at least mid-2013, unless the economy improves.

Federal Reserve will start disclosing officials’ quarterly projections
By Steven Mufson - WashingtonPost.com
The Federal Reserve took another step in its gradual march toward greater openness by agreeing to disclose its board members’ expectations about future interest rates, according to newly released minutes of the Fed’s December meeting.
The measure is designed to increase certainty and predictability about the Fed’s current policy of low interest rates — and thus encourage economic activity among investors and consumers.

Fed to Start Forecasting Changes in Interest Rates
AP - CNBC.com
The Federal Reserve will start updating the public four times a year on how long it plans to keep short-term interest rates at record lows, according to minutes from its December policy meeting.
The first forecast will be included in the central bank's economic projections after its Jan. 24-25 meeting, the minutes said.
The change marks a significant shift in theFed's communication strategy. It could help assure investors, companies and consumers that rates won't rise before a specific time. This might help lower long-term yields further — in effect providing a kind of stimulus.

Housing’s Huge Supply and Demand Imbalance
By: Diana Olick - CNBC.com
"Pent-up demand." That is the rallying cry of the housing bulls, as they forecast the great recovery of 2012. So many potential buyers are doubled up with family, stuck in undesirable rentals or just plain afraid to put their current home on the market, but that’s about to change, say these optimistic prognosticators.
"Inventories [of unsold homes] have been coming down, showing very healthy declines," Ivy Zelman, CEO of Zelman and Associates told the Wall Street Journal. And Zelman is new to the bull ring, as she is famous for predicting the housing bubble in the first place.

10 Predictions for Work and Economics in 2012
Universities in decline, women in ascension, China taking off, U.S. jobs staying grounded, and six more forecasts for the year
By Marty Nemko - TheAtlantic.com
My previous predictions have been reasonably but not perfectly accurate. Here's the link to last year's.
Long-term predictions are notoriously inaccurate. For example, 50 years ago, it was predicted we'd be commuting in flying cars. But we're probably wise to incorporate some short-term forecasts into our career, business, and investment planning. So I sally forth with my work-related predictions for 2012 and beyond:

Holidays' Retail Binge
Will Lead to a Spending Diet in Early 2012
By Barbara Thau - DailyFinance.com
The holiday season was a heck of a party for retailers, but consumers are now nursing a shopping hangover that will keep them out of the nation's stores in January and February.
While November and December will go down in the record books thanks to consumers spending like it was 1999, January retail sales are expected to sink to some of their lowest levels as Americans take stock of their credit-card spending binge, according toAmerica's Research Group, the consumer research and marketing firm.

A 2012 Conservative Case for America's Future
By Ken Blackwell; co-authored by Ken Klukowski - PatriotPost.us
The United States is at a fork in the road regarding which way we will go as a people. The 2012 election could be the most important in our lifetime, and conservative leaders have reached a consensus on how to channel the energy and concerns of the American people to realize historic change this year.
The status quo will not survive the year. Our debt and spending have reached catastrophic proportions in the context of global financial difficulties and political upheaval. Consequently, by the end of 2012, America will either have taken a decisive step toward socialistic collectivism in the name of "equality" and "social justice," where businesses and owners are punitively taxed to "pay their fair share," or America will take a major step in the direction of returning to our Founders' constitutional government, restoring the rule of law, federalism, free enterprise, and individual initiative and responsibility.

When Times Get Tough, The Tough Get A Backbone
TheEconomicCollapseBlog.com
Do not ever give up. That is one of the secrets to life. Almost everyone comes to a moment in life when things look absolutely hopeless. But those that have come through those moments know that there is always a way to turn things around. When times get tough, the tough get a backbone. Yes, a horrific economic collapse is coming and the world is going to become incredibly unstable. But the purpose of waking people up and getting them to realize what is about to happen is not so that they can shiver in fear. When a military unit gets intel that indicates that the enemy arrayed against them is far more powerful than previously thought, do they give up all hope and run away like little girls? Of course not. Instead, they use that intel to prepare for the coming battle. Only cowards give up. When you totally give up, you lose everything and the enemy wins. Our life does not consist of what we own anyway. If every single thing that you own was taken away from you, would your life be over? No! When we leave this world, we will not be remembered for what we owned. Rather, we will be remembered for how we lived.

Social Security Going Bust? That's the Small Problem
By Dan Caplinger - DailyFinance.com
Many people are in anear-panic about the woes that Social Security faces. Accused of being a Ponzi scheme, the program is projected to run out of funds by 2036 -- and if it fails, potential consequences could be disastrous. But the other major government program that retirees rely on for their financial well-being faces an even bigger problem -- one that could come sooner than Social Security's demise and lead to more bankruptcy among retirees.
That program, of course, is Medicare, and the funding situation for the portion of its benefits that retirees receive looks even scarier than Social Security's prospects right now.
Medicare's Running Out of Money, Too

Why Your Pension Is at Risk
By Dan Caplinger - DailyFinance.com
The recent bankruptcy filing from American Airlines parent company AMR (AMR) could become the latest example of what can happen to workers and their pension plans when their employers go bankrupt.
With AMR's bankruptcy proceedings having just gotten under way, it's too early to tell what could happen to some AMR employees. But past bankruptcies give a roadmap for what can happen to workers anywhere when their employer goes under.
You see, even if a company eventually gets out of bankruptcy and keeps operating throughout the process, its employees may end up with the short end of the stick -- especially those workers expecting a pension check in retirement.

Indictment in Colorado mortgage-fraud case announced
Denver Business Journal
A statewide grand jury has indicted Jill M. Evans, 46, and her company, Paramount Mortgage of Colorado Ltd. of Greenwood Village, alleging that they defruaded “more than a dozen individuals across the country out of thousands of dollars in fees for mortgages and loans she never delivered,” Colorado Attorney General John Suthersannounced Tuesday.
The 18-count indictment (download here), filed in Denver District Court, alleges that Evans defrauded her victims out of about $500,000 by charging up-front fees in exchange for what her victims believed were commercial and residential loans.

Apple television gamble the talk of CES
By Scott Martin, USA TODAY
Apple is the only company that consistently gets big buzz out of the International Consumer Electronics Show in Las Vegas — without even attending.
This year will be no different.
Connected TVs — TVs that connect to and can access content from the Internet — will be a big part of CES this year. And just about everyone in tech expects Apple at some point to launch such a television — an iTV — that easily consumes and shares with other Apple devices content served from the company's media-storing iCloud.

Why You May Be Drinking Soda
That Contains a Dangerous Flame Retardant
Banned in Europe and Japan
Some soda drinkers may be getting a dose of a synthetic chemical called brominated vegetable oil, or BVO.
By Brett Israel - Alternet.org
MARIETTA, Ga. – It's Monday night at the Battle & Brew, a gamer hangout in this Atlanta suburb. The crowd is slumping in chairs, ears entombed in headphones, eyes locked on flat-screen monitors and minds lost in tonight’s video game of choice: "The Elder Scrolls V: Skyrim."
To help stay alert all night, each man has an open can of "gamer fuel" inches from his keyboard. "I've seen some of these dudes plow through six sodas in six hours," said Brian Smawley, a regular at the gamer bar.

Canadian man passes US border using his iPad
After leaving his passport at home Canadian man Martin Reisch managed to use his iPad to cross into the United States
By Ben Quinn - The Guardian
A Canadian man who realised that he had left his passport at home as he approached the US border managed to cross over by using his Apple iPad.
In a novel deployment of the tablet that may have come as a surprise even to the late Steve Jobs, Martin Reisch said that a mildly annoyed US border officer made an exception after he was handed the iPad displaying a scanned copy of the forgotten passport.

* * * * *

'Fracking' waste disposal tied to Ohio earthquakes
By Ben Wolfgang-The Washington Times
The disposal of wastewater used in the booming practice known as “fracking” is responsible for a rash of recent earthquakes in Ohio, and critics have latched on to the seismic events as evidence that the popular natural gas extraction method is dangerous and should be banned.
Ohio has experienced at least 11 tremors since March, including a 4.0 temblor that shook Youngstown on New Year's Eve. State officials say the earthquakes were triggered by deep injection wells, where the water, sand and chemical cocktails used to frack wells are deposited.

Taliban Takes Step Toward U.S. Peace Talks
By Indira A.R. Lakshmanan and Eltaf Najafizada - Bloomberg.com
The Taliban’s announcement that it plans to open an office in Qatar for peace talks with the U.S. and its allies marks the first public step toward negotiations to end the decade-long war in Afghanistan, former U.S. officials and analysts said.
Contacts between the Obama administration and the Afghan Taliban, who were ousted from power by the U.S. military in late 2001, have been secret and limited to preliminary discussions between a few U.S. and Taliban representatives over whether peace talks were even feasible, according to a U.S. official who spoke on condition of anonymity because of the sensitivity of the subject.

No breakthrough on Mideast peace, talks to go on
By Suleiman Al-Khalidi
AMMAN (Reuters) - Israeli and Palestinian negotiators made no breakthrough during their first high-level discussions in more than a year on Tuesday, but agreed to hold further talks in Amman on a confidential basis, Jordan's foreign minister said.
Tuesday's talks were aimed at agreeing terms under which the two sides' leaders - Palestinian President Mahmoud Abbas and Israeli Prime Minister Benjamin Netanyahu - could resume talks.
Negotiations foundered in late 2010 after Israel refused to renew a partial freeze on Jewish settlement in the occupied West Bank, as demanded by the Palestinians.

Iran threatens U.S. Navy as sanctions hit economy
By Parisa Hafezi
TEHRAN (Reuters) - Iran threatened on Tuesday to take action if the U.S. Navy moves an aircraft carrier into the Gulf, Tehran's most aggressive statement yet after weeks of sabre-rattling as new U.S. and EU financial sanctions take a toll on its economy.
The United States dismissed the Iranian threat, saying it was proof that sanctions imposed over Iran's nuclear programme were working. The Pentagon said it would keep sending carrier strike groups through the Gulf regardless.

Iran-US tensions over Gulf send oil prices soaring
Brent crude spot prices rise from $107 to $111 after Tehran threatens US aircraft carrier over use of crucial shipping route
By Phillip Inman, economics correspondent - Guardian.co.uk
The price of oil jumped by $4 a barrel on Tuesday as tension betweenIran and the US fuelled fears of disruptions to supply.
Brent crude spot prices rose from $107 to $111 after Iran threatened to take action if the US navy moves an aircraft carrier into the Gulf.
US light crude, which dropped below $100 a barrel before Christmas, hit $102.23 a barrel – a rise of $3.40 on the day.
Analysts said the jump in prices was likely to continue as long as Tehran appeared ready to use force against US warships patrolling the strategically vital strait of Hormuz at the mouth of the Gulf.

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Tuesday 01.03.2012

For 2012, Signs Point to Tepid Consumer Spending
By MOTOKO RICH and STEPHANIE CLIFFORD - NYTimes.com
American consumers are running out of tricks.
As the weak economy has trudged on, they have leaned on credit cards to pay for holiday gifts, many bought at discounts. They are dipping into savings to cover spikes in gas, food and rent. They are substituting domestic vacations for international trips, squeezing more life out of their washing machines and refrigerators and switching to alternatives as meat prices have risen.
That leaves little room for a big increase in spending in 2012, economists say, a shaky foundation for the most important pillar of the American economy.

2012 Will Be More Difficult Than 2011
TheEconomicCollapseBlog.com
Do you believe that 2012 will be more difficult for the global economy than 2011 was? Well, that is what German Chancellor Angela Merkel believes. The woman that has become the most important politician in Europe recently declared that 2012 "will no doubt be more difficult than 2011". The funny thing is that she has generally been one of the most optimistic public figures in Europe throughout this debt crisis. But now even Merkel is openly admitting that 2012 is going to be a really, really bad year. Sadly, most Americans simply do not understand how important Europe is or how interconnected the global financial system has become. The United States actually has a smaller population and a smaller economy than the EU does. In fact, the EU has an economy that is nearly as large as the economies of the United States and China combined. The EU also is home to more Fortune 500 companies that the U.S. is, and the European banking system is far larger than the U.S. banking system. Anyone that does not believe that a financial collapse in Europe will have a devastating impact on the U.S. economy is living in a fantasy world. Americans better start paying attention to what is going on over there, because we are about to be broadsided by a massive financial tsunami originating out of Europe.

I Now Have 2 Million Reasons to Be Bullish on Gold
Peter Grandich - SilverBearCafe.com

"He who does not bellow the truth when he knows the truth makes himself the accomplice of liars and forgers." - Charles Peguy

If there's been one overriding theme I've stressed from when I turned bullish on gold at just over $300 in the spring of 2003, it's that the financial industry and most of those who report about it and the markets hate gold. I said it's foolhardy to expect there ever to be a universally bullish view for gold, and that we should appreciate that there will always be forces whose desire is for gold's price to be suppressed, lower than where it would be in a free market. Ironically, those who support such price suppression are the ones who call people like me and the good people at GATA tin-foil hat wearers, fanatics, or worse.

Powerful Rebound In Gold and Silver Prices About To Begin?
Jeb Handwerger - SilverBearCafe.com
Rarely has such technical destruction been visited on stalwart sectors such as gold, silver and the mining stocks(GDX). The silver charts reveal technical damage not seen since the destruction of 1984. It can only be conjecture that can account for a once in a generation obliteration of a once hallowed sector. It must be remembered that both gold(GLD) and silver(SLV) had major moves earlier this year to the $1900 and $50, surpassing overhead resistance and reaching overbought territory. This may be the reason why the decline in precious metal is overextended and extremely oversold. We urged caution back in April for silverand in September for gold. Silver has characteristically corrected close to 50% from its highs, while gold has fallen less than 20%. Pullbacks are normal and restorative in a secular bull market in precious metals especially after explosive moves.

Gold: Bulls and bears; where next in 2012?
By Julian Phillips - CommodityOnline.com
In 2011 investors saw Gold perform outstandingly in the quiet season in July and August. $2,000/oz looked a certainty before the end of the year, but then unusual forces pummelled the gold price and all other global financial markets. Shades of the credit crunch hit the markets under the title of the Eurozone debt crisis. This had been going on for the last two years, but it entered a very dangerous stage in the final quarter of 2011.

Silver 2012 predictions:
What do you think - bearish or bullish?
By Commodity Online
Previous year has been a very mixed for Silver investors. By April it was very bullish for silver which rose 61% compared to the closing level in 2010. Silver suffered a setback in 2011, backtracking from a near-doubling in price during 2010, as worries about the global economy and a recent slide in Goldhurt demand. This is its first annual loss in three years.
Silver is now however well below the $30 mark and is thus over 10% in the red from its peak. The huge gains in the first 5 months of 2011 were completely erased in 7 months that followed. A significant setback for the silver bull!

Did Bankers Deliberately Crash MF Global
to Crash Gold and Silver Prices?
J.S. Kim - SilverBearCafe.com
Did bankers use the MF Global to suppress gold and silver prices and create the panicked appearance of collapsing precious metals to give themselves additional precious time to delay the crash of the Euro and the US Dollar? As crazy as this sounds, a closer investigation of some key data seems to imply this possibility. Though bankers claim that they created futures markets to provide a mechanism for commodity producers to hedge against volatile market prices.

Precious Metals In Your IRA
J.D. Seagreaves - SilverBearCafe.com
Since you're taking the time to read this article, you must already know that precious metals are a vital part of your investment strategy. However, there's a way to start adding gold and silver to your portfolio using a tool you already have: Your Individual Retirement Account.
A lot of people already have an IRA account and they might think that they know how to use it to their best advantage. But what many don't know is that you can - and probably should - use your IRA to invest in precious metals. After all, an IRA is designed to save for retirement, and there's nothing that's more likely to keep its value into your golden years then, well, gold! It's easier than you may think to get started, too.

The Year of Governments Living Dangerously
The Fed’s low-interest policy is doing little to help banks and doing a lot to put public pension funds in jeopardy.
By GEORGE MELLOAN, WSJ.com via LuxLibertas.com
What words could best describe the most baleful influence on the global economy in the year 2011? How about "governmental dysfunction?"
The European banking crisis that has threatened global finance is about nothing more or less than the failure of the governments of Greece, Italy, Portugal, et al., to control their budgets, raising doubts about the value of their bonds. Rather than trim their bloated public sectors, they have preferred to beg for bailouts.
The U.S. government has run deficits exceeding a trillion dollars for the last three fiscal years, forcing it to borrow heavily from the Federal Reserve, China and Japan. Despite warning signals from credit-rating agencies, Washington is doing no better than the Europeans in bringing spending under control.

Catherine Austin Fitts on Wall Street's Corruption,
the Austrian School and Who's 'Really' in Charge
Daily Bell Interview - SilverBearCafe.com
.... Daily Bell: Are things getting better or worse from a corruption and freedom standpoint in the US?
Catherine Austin Fitts: Things are getting worse. On a positive note, there are some advantages to have the "beast" come out of the closet.
Daily Bell: Give us a summary of your perspective regarding Wall Street - and what happened to you in a little more detail.
Catherine Austin Fitts: I think Wall Street is the pit bull, not the master. The $64,000 question is, of course, who is really in charge and why are they behaving this way?
I have had the opportunity to operate at high levels in Washington and Wall Street and have never met a person who did not function as if they were a prisoner of the system. Often, that "system" did not permit them to function on a lawful basis. This implies highly centralized governance if this many people are functioning in an insecure, limited or unlawful way.

Iran currency plunges 10% as US strengthens sanctions
Riyal falls to record low after Obama administration blacklists Tehran's central bank
Agencies in Tehran - Guardian.co.uk
Iran's currency value has fallen more than 10% in less than a week to record lows, after a US move to tighten financial sanctions against the Islamic republic.
The riyal lurched to as low as 16,800 to the dollar, down from 15,200 at the end of last week. It was valued at 10,500 just a year ago.
The slump was blamed on US sanctions which target the Iranian central bank. The White House move to blacklist any company or institution that trades with the Central Bank of Iran aims to make it harder for Iran to sell its oil.

Iran tests missile that could hit US bases, Israel
Naval drill comes amid rising tension over Tehran's disputed nuclear program
msnbc.com news services
Updated at 6:25 a.m. ET: Iran test fired its second long-range missile during a naval exercise in the Gulf, state TV's website quoted a senior navy commander saying Monday.
"Today our Nour (Light) surface-to-surface long range missile was also successfully launched," said deputy navy Commander Mahmoud Mousavi.
Published at 4 a.m. ET: Iran said Monday it had successfully test fired a long-range missile during its naval exercise in the Gulf, flexing its military muscle to show it could hit Israel and U.S. bases in the region if attacked.

Ambrose Evans-Pritchard:
2012 could be the year Germany lets the euro die
So we enter Year IV of the Long Slump, the cruellest yet though not the most acute.
By Ambrose Evans-Pritchard - Telegraph.co.uk
There will be no Chinese credit explosion this time, no real help from post-bubble India or over-stretched Brazil.
It will be a global downturn on all fronts, aborting what remains of recovery even before industrial output in the OECD bloc has regained its pre-Lehman peak.
The second wave will hit with youth unemployment already at 45pc in Greece and 49pc in Spain; and with the US labour participation rate already at depression levels of 64pc.

Euro Crisis Spoof Becomes YouTube Hit
Merkel the Mistress, Sarkozy the Butler
Spiegel.de
Angela Merkel is the lady of the manor and Nicolas Sarkozy her fawning butler. A German video clip has become a YouTube hit by parodying the roles of the two leaders in the euro crisis. It's a spoof version of the 1963 comedy sketch "Dinner for One," which is broadcast each year as a bizarre part of the German New Year's Eve ritual.
The sketch "Dinner for One," recorded in 1963 by two little-known British comedy actors, is virtually unheard of in Britain but has Germans in stitches once a year when it is broadcast on TV as part of the staple New Year's Eve schedule.
The plot is simple: Miss Sophie sits down at an empty table for a grand 90th birthday banquet with imaginary, long-dead guests who each have to be played by the hapless butler James. He gets steadily more drunk because he has to join her in toasts in his various roles as the dinner progresses.

Eurozone collapse 'starts this year' says CEBR
Europe's single currency is almost certain to disintegrate within the next decade, a leading think tank has predicted, with Greece and Italy potentially abandoning the euro this year.
By Rachel Cooper - Telegraph.co.uk
As the troubled euro marked its 10th anniversary this weekend, the Centre for Economics and Business Research (CEBR) said there was a 99pc chance that the currency would not survive the next 10 years.
"It now looks as though 2012 will be the year when the euro starts to break up," the CEBR said.
The think tank added that Britain could well be in recession already, with growth likely to contract in the final quarter of 2011 and the first quarter of 2012.

Promises Go Out the Window
as Spain Undertakes Huge Tax Increase
Coupled With Biggest Budget Cut in History;
Depression in Spain will Worsen
BY Mike Shedlock
[translated article]
....With those tax hikes and budget cuts, Spain is just back to where it claimed (lied) to be a couple months ago.
In theory these cuts will put Spain on target. In practice they won't. Unemployment rate is already 22.8% and it will rise. Spending will plunge and so will estimated revenues from VAT and other taxes. Expect more business bankruptcies as well, and those bankruptcies will impact the solvency of banks. In short, these moves will backfire and the depression in Spain will worsen.

Spain: 2011 deficit could be higher than 8 percent
By Daniel Woolls - Associated Press
MADRID — Spain's government will approve further deficit-reduction measures this week, on top of the bombshell euro15 billion package of tax hikes and spending cuts they announced only days ago, ministers said Monday.
They also said the 2011 budget deficit could be even higher than the 8 percent of GDP announced last week. That figure was already a major increase on the 6 percent forecast by the previous government.
Treasury Minister Cristobal Montoro said the new measures would be passed at a Cabinet meeting Thursday. The previous austerity package was announced last Friday.

Financial Troubles For Many Nations In The New Year
Bob Chapman - SilverBearCafe.com
2012 is going to be quite a year with falling economies in the UK, Europe, the US, China, Japan and the remainder of Asia. Latin America, and Mexico by comparison should fare fairly well overall. England is in a death spiral. Europe is next, the US is not far behind and China and Japan will soon join the disjoined group. We are about to witness the end of the period that developed since the end of WWII. That is economically, financially, socially and politically.
The transition into the future is going to be borne out of chaos. If you have any doubt just look at the recent legislation passed in the US allowing the president to pick up and incarcerate, torture or murder dissidents. Americans will be labeled terrorists for any reason government decides. This is corporatist fascist dictatorial government.

Euro begins 2012 on weak note
Euro-yen rate remains below ¥100
By Deborah Levine and William L. Watts, MarketWatch
NEW YORK (MarketWatch) — The euro declined in holiday-thinned trade Monday after data indicated manufacturing activity across the region shrank for a fifth straight month.
The euro changed hands at $1.2931, down from $1.2996 at the end of the previous week. Trading was quiet with London and U.S. remaining closed for the New Year’s Day holiday.

Dream of Universal Currency Just Won’t Die
By David Wolman - Wired.com
The euro zone maelstrom refuses to end. Thanks to the debt crisis, some Greek officials are contemplating dumping the common currency for the drachma. Meanwhile, Italy and Spain teeter. A decade after the shared currency was heralded as a 21st-century tool for peace and prosperity, it turns out that currency unions aren’t such a hot idea.
Not so fast, though. This is undeniably a period of epic turmoil, and many economists will tell you that sovereign states need sovereign currencies—full stop. But this notion ignores a fundamental truth: Countries with their own currency may have monetary independence, but in reality—as gun battles in Libya, CDOs in the US, and tsunamis in Japan have taught us—we are only becoming more economically intertwined, regardless of what our coins look like.

Helicopter Ben's Last Roll
Vox Day - SilverBearCafe.com
For the first year after the publication of “The Return of the Great Depression," there were numerous critics who gleefully cited the media reports of economic recovery. The green shoots that Ben Bernanke’s eagle eye had spotted appeared to have blossomed into genuine economic growth and the National Bureau of Economic Research declared the recession to be officially over in 2009. However, the persistence of high unemployment rates despite the best efforts of the statisticians at the Bureau of Labor Statistics to hide the decline and the growing number of defaulting homeowners tended to belie all of the good news.

We Are Going To Kill The Dollar
Investor Kyle Bass discloses his discussion with a senior Obama admin about how this economic crisis is going to play out. The answer is to export our way out of this mess by making our exports cheaper by destroying the dollar in a global game of currency devaluation. This simply means that they are going to print more and more dollars until all of your purchasing power is destroyed and you will need more and more dollars to buy the same amount of goods. (ie. Massive Inflation.)

Formerly Great Cities All Over America
Are Turning Into Open, Festering Sores
EndOfTheAmericanDream.com
Once upon a time, the people of the United States constructed beautiful, shiny cities from coast to coast that were the envy of the entire globe. We had the largest and most vibrant middle class that the world has ever seen and life was quite good in America. But now all of our prosperity is coming crashing down and many of our formerly great cities are turning into open, festering sores. Unfortunately, we are drowning in so much debt that we can barely even slow down the shocking decline of our cities. Over the past decade, tens of thousands of manufacturing facilities and millions of good jobs have been shipped out of the United States. As our economic infrastructure has been ripped out right in front of our eyes, an atmosphere of unemployment, poverty and despair has descended on many of our major cities like a soaking wet blanket. Today, many of our cities that once were considered to be some of the greatest in the world have been transformed into rotting, post-apocalyptic hellholes. When you visit many of these cities and look into the sunken eyes of the residents, you almost get the feeling that something has sucked all of the hope and all of the life right out of them. For a while, large numbers of Americans still believed that the right politician would bring them "hope" and "change", but now crushing despair is giving way to absolute desperation for millions of people. Desperate people do desperate things, and as our major cities continue to decay they are going to become very dangerous places to be.

Low mortgage rates likely to continue through 2012
But with high unemployment and home prices still falling in many areas, analysts say there is little chance for a housing recovery.
By E. Scott Reckard, Los Angeles Times
The mortgage market told a sad story throughout 2011: record low rates, but few people taking advantage of them to buy homes.
The likely scenario in the new year, according to many analysts, is more of the same. Although the Federal Reservehas pledged to keep rates low through 2013, the experts say high unemployment and home prices that are still falling in many areas provide little incentive for stressed-out consumers to surge back into the housing market.

Foreclosure free ride: 3 years, no payments
By Les Christie @CNNMoney
NEW YORK (CNNMoney) -- Delinquent borrowers facing foreclosure are learning that they can stay in their homes for years, as long as they're willing to put up a fight.
Among the tactics: Challenging the bank's actions, waiting to file paperwork right up until the deadline, requesting the lender dig up original paperwork or, in some extreme cases, declaring bankruptcy.
Nationwide, the average time it takes to process a foreclosure -- from the first missed payment to the final foreclosure auction -- has climbed to 674 days from 253 days just four years ago, according to LPS Applied Analytics.

As Crop Prices Soar, Iowa Farms Add Acreage
By A. G. SULZBERGER - NYTimes.com
WHITTEMORE, Iowa — A splash of green on a solid beige horizon, the golf course at the edge of this tiny town promised residents nine modest holes of refuge from corn country. Decades earlier the spot had been farmed, too, but the rocky soil was so poor, the saying went, that you couldn’t raise hell there with a fifth of whiskey.
"The rottenest piece of land there is" said Mick Elbert, a local car dealer who served on the golf association board. "All it is good for is a golf course. That’s why we built it there."

American Airlines warns of scam emails
By Hugo Martin - LATimes.com
If you get a suspicious email that appears to be from American Airlines, it could be part of a scam to pilfer personal information.
The airline suspects that hackers have sent out, as recently as November, what are known as "phishing" emails intended to mislead people into giving up information such as their passwords to the airline's reward program.
To warn customers, American Airlines has posted several examples of the phony emails on its website.

Gun makers baffled by ATF criteria
Models OK’d on case-by-case basis
By Chuck Neubauer-The Washington Times
The Bureau of Alcohol, Tobacco, Firearms and Explosives is in charge of determining whether a gun model is legal, but the agency won’t say much about its criteria.
Despite overseeing an industry that includes machine guns and other deadly weapons, ATF regulations for the manufacture of weapons are often unclear, leading to reliance on a secretive system by which firearms manufacturers cansubmit proposed weapons for testing and find out one at a time whether they comply with the law, critics say.

Obama Signs Draconian NDAA Citizen Detention Bill
By Kurt Nimmo - Infowars.com
On this first Infowars Nightly News show of 2012, Alex talks about the imploding economy with Catherine Austin Fitts, the former managing director and member of the board of directors of the Wall Street investment bank Dillon, Read & Co. Inc., and Assistant Secretary of Housing and Federal Housing Commissioner at the United States Department of Housing and Urban Development in the first Bush Administration.
Alex covers Obama’s signing of the National Defense Authorization Act, a draconian bill that will allow the military to arrest American citizens and disappear them into a secret labyrinth tribunal system where victims may be kept for years without access to due process and the protection of the Fourth Amendment.

Obama Signs Martial Law Bill: NDAA Now Law

Comments on the Housing Vacancies
and Homeownership Survey
by CalculatedRisk
This morning Dean Baker wrote about the Housing Vacancies and Homeownership Survey: Robert Samuelson Oversells the Case for Economic Optimism (ht Joe)

We are still far from making up for the overbuilding of the bubble years as indicated by the fact that the vacancy rate remains at near record levels.
(There have been some questions raised about the accuracy of the Census Department's data, claiming that it overstates the number of housing units in the country. Those raising the issue fail to note that measures of housing starts do not include housing units that were created by conversion of commercial or industrial property, such as an old warehouse being turned into condos. The rehabilitation of dilapidated units would also not be included in housing start numbers. There were many cases of both ways of adding to the housing stock during the bubble years. Also, it is important to note that the Census data is giving the percentage of units that are vacant. The critics of this measure must show how the Census methodology would lead it to overstate the share of units that are vacant.)

Latin oil supplies for U.S. start to dry up
Canadian pipeline can fill gap
By Patrice Hill - The Washington Times
The political and environmental debates swirling around the proposed $7 billion Keystone XL pipeline from Canada to Texas miss a crucial point, energy analysts say: The Canadian oil is needed to replace fast-dwindling production from two other major suppliers of oil - Mexico and Venezuela.
The United States remains the largest consumer of oil in the world, requiring more than 8 million barrels a day of fuel imports to feed its appetite, with nearly half of that coming from oil-rich neighbors in Latin America as recently as 2005.

S. Korean president sees 'window' to deal with North
By Chico Harlan - WashingtonPost.com
BEIJING — Saying the Korean Peninsula was "at a turning point," South Korean President Lee Myung-bak on Monday offered North Korea a "window of opportunity" to improve relations but warned of a powerful retaliation if Pyongyang launches another military strike.
"There should be a new opportunity amid changes and uncertainty," Lee said. "If North Korea shows its attitude of sincerity, a new era on the Korean Peninsula can be opened."

China's domestic over-capacity
and stagnating global demand point to hard landing
Downside risks to the Chinese economy in 2012 come from a sluggish global economy, domestic industrial over-capacity and a weak property market, Bank of China has said.
By Garry White - Telegraph.co.uk
The Chinese economy is the most important indicator for commodity markets.
The report from China's second-biggest lender forecast GDP growth in the Asian powerhouse of 8.8pc in 2012, compared with 9.3pc in 2011, the state-controlled China Daily newspaper reports.
The property market remains of great concern and there are predictions for a fall in prices of as much as 20pc this year.
Sales of new residential property in Beijing are expected to be about 90,000 units, 18pc fewer than the 111,000 that were sold in 2011 and almost half of the 179,000 sold in 2009, a survey commissioned by China Daily found.

Israeli and Palestinian delegates
to hold first talks for 15 months
Israeli and Palestinian delegates will hold their first direct talks in 15 months on Tuesday, although hopes for a breakthrough remain slender with the two sides bitterly divided over the issue of Jewish settlement construction in the West Bank.
By Adrian Blomfield - Telegraph.co.uk
The meeting, brokered by King Abdullah of Jordan, is seen as a last-ditch effort to rejuvenate the Middle East peace process, which has been stalled since September, 2010 when US-sponsored negotiations collapsed.
But neither the Israeli government nor the Palestinian Authority said they believed it possible to resume serious talks. Palestinian officials have demanded a halt to all Israeli settlement building as a precondition for joining talks, saying that continued construction was destroying their chances of ever building a viable state of their own.

The Muslim Brotherhood Will Not Recognize Israel,
Says Deputy Leader
The peace treaty will be put to a referendum.
From theTrumpet.com
The Muslim Brotherhood, the terrorist-affiliated party leading in Egypt’s elections, will never recognize Israel, its deputy leader, Dr. Rashad Bayoumi, said in an interview published by the London-basedal-Hayat newspaper January 1.
Recognizing Israel, he said, "is not an option, whatever the circumstances; we do not recognize Israel at all. It’s an occupying criminal enemy." He laterelaborated, calling it "an enemy entity, an exploiting, criminal occupier."
He said the Muslim Brotherhood would not negotiate with Israel. "I will not allow myself to sit down with criminals," he said.

Al-Qaeda and Taliban commanders
seek Pakistani militants' help to fight US forces
Prominent al-Qaeda and Afghan Taliban fighters asked Pakistani militants in a pair of rare meetings to set aside their differences and step up support for the battle against US-led forces in Afghanistan, militant commanders said on Monday.
Telegraph.co.uk
The meetings were held in Pakistan's tribal region in November and December at the request of the Afghan Taliban's leadership council.
They could indicate the militants are struggling in Afghanistan, or conversely, that they want to make sure they hit US forces hard as the Americans accelerate their withdrawal this year. That could give the Taliban additional leverage in any peace negotiations.
"For God's sake, forget all your differences and give us fighters to boost the battle against America in Afghanistan," senior al-Qaeda commander Abu Yahya al-Libi told Pakistani fighters at a meeting on Dec 11, according to a militant who attended.

Apocalypse not now:
2012 doomsday predictions debunked by NASA
By Charles Q. Choi - MSNBC.com
On Dec. 21, 2012, many doomsday believers fear the apocalypse — anything from a rogue planet smashing into us to our world spinning end over end. However, the world should expect nothing more next year than the winter solstice, the longest night of the year, NASA says.
Many people point to the end of the Mayan Long Count calendar on Dec. 21, 2012 as evidence of the coming apocalypse, but astronomers have been quick to stress that there is nothing to be concerned about.

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Monday 01.02.2012

Supplies of gold and silver American Eagles
adequate as demand drops - U.S. Mint
The U.S. Mint, which has had problems in meeting demand for its gold and silver American Eagle coins in the past says supplies are adequate to meet current demand at a lower level.
Author: Frank Tang - Mineweb.com
NEW YORK (REUTERS) -
The United States Mint said on Wednesday it has enough American Eagle gold and silver bullion coins to meet demand and does not expect to allocate them in early 2012.
Sales of the U.S. gold and silver bullion coins have slowed in the fourth quarter as precious metals prices retreated from record highs, bucking a trend earlier this year when investors flocked to physical gold and silver as safe havens.
"As we plan on having sufficient quantities of all coins available, we do not anticipate having to allocate the initial release," U.S. Mint spokesman Michael White said in a note.

The Year U.S. Debt Beat Gold
By Derek Thompson - TheAtlantic.com
The economy doesn't care about the calender, but journalists and readers do. So, although December 30 is no better time to lift up and take stock of the last 12 months than any other day of the year, it's around this time that we get the best, most complete summaries of the state of the economy.
Take, for example, this wonderful round-up of investments in 2011, via Suzy Khimm. It crystallizes one of the 2011's most angst-inducing facts for liberals. In a year where the Federal Reserve worried about inflation, Congress worried about the deficit, and nobody in government seemed to put equal energy into job-creation, the 2011's best bet was debt. In a year where Bill Gross fled bonds and goldbugs kept up their chirping, investment in U.S. bonds paid off better than gold.

Five factors affecting the gold price
By Rajivi Sharma - CommodityOnline.com
Gold is a precious metal with which mankind has had a long and illustrious relation and continues to do so. Gold served as money until other forms of currency were devised and even now gold is bought as an investment. The innate high value of gold makes it a reliable form of wealth, no matter the conditions. This makes it a hedge against economical fluctuations. The actions of people based on this principle drive the price of gold.
For the prospective buyer of gold, it is important to know what all factors affect the rates of gold. This will allow a person to predict with good accuracy the trends in the rates and thus be able to direct an investment to more profit.

Could gold confiscation become a reality?
There is increasing worry that The U.S. and other governments may confiscate citizens' gold holdings and use them to help mitigate the Global Financial Crisis.
Author: Julian D. W. Phillips - Mineweb.com
BENONI - Many of the leading fund managers in the U.S. and elsewhere are expecting that governments will confiscate their citizen's gold. This will not be for the same reasons used in 1933. It will be to facilitate loans, swaps lower interest rates, and shore up international confidence in the turbulent, stressed paper-currency world in which we live. Each nation issues paper as money, dependent on the trust that nation can engender at home and abroad. But is this going to be sufficient, moving into an ever more turbulent 2012?

Gold will bottom in Jan-Feb, then explode to $1900/oz
By Toby Connor - CommodityOnline.com
With the move below $1535 this morning Gold has confirmed that it is still moving down into a D-Wave bottom. There has been some question as to whether or not the D-Wave had bottomed in September. The penetration of that intermediate low this morning confirms that the D-Wave did not end during the overnight sell off on September 26.
In the chart below I have marked with blue arrows the last several yearly cycle lows. As you can see they tend to occur in January or February. The timing band for the next cycle low should occur sometime in early to mid January. That should mark the bottom of this D-Wave decline with the slight possibility that there could be one more short daily cycle down,bottoming in early February.

Unrestrainedly bullish on gold - even more so on silver
James West of the Midas letter warns against gold and silver price volatility influencing investment decisions in what he sees as a strongly bullish investment sector. Gold Report interview.
Author: Brian Sylvester - Mineweb.com
PETALUMA, CA - The Gold Report: Since you launched the Midas Letter Opportunity Fund earlier this year, some might suggest The Midas Letter is beholden to companies held by funds and is not as objective as it once was.
James West: It's definitely not as objective as it was once. I'm very biased toward the companies I choose to cover because I am invested in them, my retail subscribers are invested in them and now my institutional clients are invested in them. But the caveat is that the companies are now beholden to me-not vice versa-because if they don't deliver on what they represent, I will ensure that the whole world knows about that.

Bank failures ease, but more expected in 2012
By Joan E. Solsman - MarketWatch.com
U.S bank failures have slowed to a trickle at the end of 2011, but that doesn't mean they're coming to an end.
The failures continued to abate in both number and size this year, and the ranks of distressed banks at risk of failing finally diminished. However, a newer, slower pace at which distressed banks are folding suggests small, plodding failures could extend far into the future.
This year, only 92 banks failed, compared with 157 in 2010 and 140 in 2009. The size of failed banks has dropped even more sharply: The total amount of assets at failed banks this year is down 63% from last year.

Gallup.com Year in Review
What we learned in 2011
by Lymari Morales
WASHINGTON, D.C. -- Gallup.com provides a retrospective of 2011, summarizing some of the top findings of the year.

The Only Hope In The Coming Storm
by David Wilkerson - WorldChallenge.org
God promised the prophet Zechariah that in the last days he would be a protective wall of fire around his people: "For I, saith the Lord, will be unto her a wall of fire round about" (Zechariah 2:5).
Isaiah also testifies to this: "For thou hast been a…shadow from the heat, when the blast of the terrible ones is as a storm against the wall" (Isaiah 25:4). "There shall be a tabernacle for a shadow in the daytime from the heat, and for a place of refuge, and for a covert from storm and from rain" (4:6).
These promises are meant to comfort us as "prior warnings." You see, all the prophets warn of a great storm coming in the final days. And this storm will beat against God’s wall of protection with ferocity.

The Number One Catastrophic Event
That Americans Worry About: Economic Collapse
TheEconomicCollapseBlog.com
Can you guess what the number one catastrophic event that Americans worry about is? There are certainly many to choose from. Many Americans are deathly afraid of a major terrorist attack. Others live in constant fear of natural disasters such as earthquakes, volcanoes and hurricanes. Still others are incredibly concerned that a massive pandemic will break out at any time or that World War III will erupt in the Middle East. Yes, there are certainly a lot of potential catastrophic events that one can worry about in the times in which we live, but the number one catastrophic event that Americans worry about is actually "economic collapse". At least that is what arecent survey conducted by Leiflin Inc. for the EcoHealth Alliance found. But this goes along with what so many other polls have found over the past few years. Over and over again, opinion polls have found that the number one issue that American voters are concerned about is the economy. The truth is that average Americans are deeply, deeply concerned about unemployment, debt, the housing crash and the steady decline in the standard of living. It has been years since the U.S. economy has operated at a "normal" level, and many Americans are afraid that things could soon get a whole lot worse.

Is America Losing Control?
"Events are in the saddle and ride mankind."
by Patrick J. Buchanan - LewRockwell.com
In describing 2011, few cliches seem more appropriate. For in this past year, we Americans seemed to lose control of our destiny, as events seemed to be in the saddle.
While President Barack Obama maneuvered skillfully to retain a fighting chance to be re-elected, the economy showed no signs of returning to the robustness of the Reagan or Clinton years. And Obama is all out of options.
By January 2013, he will have added $6 trillion to a national debt that just earned America a downgrade on its AAA credit rating.

30 Statistics That Show
That The Middle Class Is Dying
Right In Front Of Our Eyes As We Enter 2012
TheEconomicCollapseBlog.com
Once upon a time, the United States had the largest and most vibrant middle class that the world has ever seen. Unfortunately, that is rapidly changing. The statistics that you are about to read prove beyond a reasonable doubt that the U.S. middle class is dying right in front of our eyes as we enter 2012. The decline of the middle class is not something that has happened all of a sudden. Rather, there has been a relentless grinding down of the middle class over the last several decades. Millions of our jobs have been shipped overseas, the rate of inflation has far outpaced the rate that our wages have grown, and overwhelming debt has choked the financial life out of millions of American families. Every single day, more Americans fall out of the middle class and into poverty. In fact, more Americans fell into poverty last year than has ever been recorded before. The number of middle class jobs and middle class neighborhoods continues to decline at a staggering pace. As I have written about previously, America as a whole is getting pooreras a nation, and as this happens wealth is becoming increasingly concentrated at the very top of the income scale. This is not how capitalism is supposed to work, and it is not good for America.

Keiser Report: Outrageous Predictions for 2012 (E230)

Iran says it has produced its first nuclear fuel rod
By Ramin Mostaghim in Tehran
and Alexandra Zavis in Beirut - LATimes.com
REPORTING FROM TEHRAN AND BEIRUT -- Iran said Sunday that its scientists had produced the country’s first nuclear fuel rod and its navy had test-fired a new medium-range surface-to-air missile, announcements that were likely to heighten concerns about the country’s disputed uranium-enrichment program.
The Islamic Republic News Agency, or IRNA, reported that the nuclear fuel rod had "passed all physical and dimensional tests" and had been inserted into the core of Tehran’s research reactor.
Iran had said that it would be forced to manufacture the rods because it is barred from buying them on foreign markets. The tubes contain pellets of enriched uranium that provide fuel for nuclear reactors.

The coming war with Iran
Regional chaos might count as a win for the mullahs
By Reza Kahlili-The Washington Times
Iran’s tyrannical leaders, determined to make the Islamic regime a nuclear-armed state, are preparing for war. That’s exactly what the United States and Israel might have to deliver, and soon. @-Text.rag:Iran’s Supreme Leader Ayatollah Ali Khamenei ordered the Revolutionary Guards in May to speed up the regime’s nuclear-bomb program and arm its missiles with nuclear warheads. Now, sources reveal, Ayatollah Khamenei has ordered the guards to prepare for war.
In a recent meeting of Iran’s Supreme National Security Council, it was decided that the possibility of an attack by Israel or America in 2012 is real and that the country’s forces need to prepare several contingencies for war. It also was concluded that in case of war, the regime could be victorious, though the cost would be high, but it would emerge as the one and only champion of the Islamic cause in the world.

Iran navy tests surface-to-air missile in drill
By ALI AKBAR DAREINI - AP - DailyFinance.com
TEHRAN, Iran -Iran's navy said Sunday it test-fired an advanced surface-to-air missile during a drill in international waters near the strategic Strait of Hormuz, the passageway for one-sixth of the world's oil supply.
Iran's state TV said the missile, named Mehrab, or Altar, is designed to evade radar and was developed by Iranian scientists. The report said the missile was tested Sunday but provided no further details.
A leading Iranian lawmaker said the sea maneuvers serve as practice for closing the Strait of Hormuz if the West blocks Iran's oil sales. After top Iranian officials made the same threat a week ago, military commanders emphasized that Iran has no intention of blocking the waterway now.

Strait of Hormuz:
Threats exchanged, U.S. carrier tracked
By Amy Hubbard - LATimes.com
ran and the U.S. continued to trade words Thursday over an Iranian threat to close the Strait of Hormuz to oil tanker traffic. Meanwhile, Iran said it had tracked a U.S. aircraft carrier in the Persian Gulf.
The action by an Iranian surveillance plane showed that Iran had "control" over moves by foreign forces in the region, the Associated Press quoted from an official Islamic Republic News Agency report.
Tehran is currently holding a 10-day military exercise in international waters near the Strait of Hormuz.

MAP: Strait of Hormuz

War Imminent in Straits of Hormuz? $200 a Barrel Oil?
Written by John Daly - OilPrice.com
The pieces and policies for potential conflict in the Persian Gulf are seemingly drawing inexorably together.
Since 24 December the Iranian Navy has been holding its ten-day Velayat 90 naval exercises, covering an area in the Arabian Sea stretching from east of the Strait of Hormuz entrance to the Persian Gulf to the Gulf of Aden. The day the maneuvers opened Iranian Navy Commander Rear Admiral Habibollah Sayyari told a press conference that the exercises were intended to show "Iran's military prowess and defense capabilities in international waters, convey a message of peace and friendship to regional countries, and test the newest military equipment." The exercise is Iran's first naval training drill since May 2010, when the country held its Velayat 89 naval maneuvers in the same area. Velayat 90 is the largest naval exercise the country has ever held.

Iran seeking to expand influence in Latin America
Iran seeks to skirt sanctions and expand influence in U.S. back yard -- By Joby Warrick - WashingtonPost.com
Iran is quietly seeking to expand its ties with Latin America in what U.S. officials and regional experts say is an effort to circumvent economic sanctions and gain access to much-needed markets and raw materials.
The new diplomatic offensive, which comes amid rising tensions with Washington and European powers, includes a four-nation swing through South and Central America this month by Iranian President Mahmoud Ahmadinejad. His government has vowed to increase its economic, political and military influence in the United States’ back yard.

What’s Behind the Euro Crisis and How Will It End?
BY ANTONY P. MUELLER - FinancialSense.com
While the pronouncement of the "euro crisis" has become a main topic in the newsrooms and while a plethora of pundits hasn’t got tired of predicting the end of the common Europeancurrency, the facts tell a different story. By the end of 2011 the euro was quoted higher than its long-term average since its inception and the official inflation rate of the euro zone has been kept under two percent. The average debt burden of the countries that make up the euro-zone is less than that of the United States or Japan. What is, then, the problem with the euro? Why doesn’t a day go by without a headline that says that the euro is doomed and that it would be only a matter of time until the European Monetary Union and the European Union, too, would blow apart?

Peter Schiff - CNBC 30 Dec 2011

European leaders predict 2012 will be worse than 2011
Angela Merkel says new year will 'undoubtedly' be harder than the last as eurozone crisis hangover prompts more austerity
By Lizzy Davies and agencies - Guardian.co.uk
The German chancellor, Angela Merkel, has warned that the year ahead will "undoubtedly" be harder than 2011 in the starkest of a series of downbeat messages from European leaders dominated by fears over the economy.
Merkel said Europe was experiencing its "harshest test in decades" but would ultimately be made stronger by the crisis.
Urging greater European co-operation to salvage the Euro, Merkel said the German economy was performing well "even if the next year will undoubtedly be more difficult than this one".

Euro Leaders Aim to Buy Time to Save Currency
By Patrick Donahue - Bloomberg.com
European leaders return to work this week seeking to buy time for the Spanish and Italian governments to wrest control over their debt and rescue the single currency from fragmentation as the region’s crisis enters a new year.
Some 157 billion euros ($203 billion) in debt will mature in the 17-member euro area in the first three months of 2012, according to UBS AG. By the end of that period, leaders have pledged to draft a stricter rulebook on reining in debt. German Chancellor Angela Merkel and French President Nicolas Sarkozy will meet in Berlin Jan. 9 to flesh out the details.

Presenting The Exchange Stabilization Fund In 5 Parts:
Is This The Real "Plunge Protection Team"?
Submitted by Tyler Durden - ZeroHedge.com
When it comes to the fabled President's Working Group on Capital Markets, also known as the Plunge Protection Team, the myths about the subject are certainly far greater than any underlying reality. To be sure, vast amounts of popular folkflore has been expounded into the public arena, with most of it being shot down simply due to it assuming conspiracy theories of such vast scale that the human mind is unable to grasp the complexity, and ultimately the inverse Gordian Knot makes an appearance with the claim that vast conspiracies are largely untenable simply because it is impossible to keep a secret from so many people for so long. Yet what if the secret is not a secret at all but is fully out in the open, and is only a matter of interpretation, and contextualizing? Why just 3 years ago it would appear preposterous to allege the capital markets are a ponzi and that the Fed does everything in its power to keep stocks higher. Well, what a difference three years make: now the Chairman himself in a Washington Post OpEd has admitted that the sole gauge of Fed success is the loftiness of the Russell 2000, neither unemployment nor inflation really matter now that the Fed's third mandate has been fully whipped out.

Foreign central banks cut US treasuries
By Michael Mackenzie in New York - FT.com
Holdings of US Treasuries by foreign central banks has fallen by a record amount over the past four weeks according to the latest Federal Reserve data.
The net $69bn drop in Treasury holdings registered at the Fed by foreign official institutions comes as benchmark yields ended 2011 near record low levels and when the US central bank is conducting Operation Twist, its $400bn programme to sell shorter-lived Treasury bonds and buy those with longer maturities.

China’s Central Bank
to Keep Monetary Policy 'Prudent' in 2012, Zhou Says
By Bloomberg News -
The People’s Bank of China will maintain a "prudent" monetary stance to ensure policy remains stable in 2012 and improve its management of foreign-exchange, Governor Zhou Xiaochuan said.
The central bank will "deepen financial reform, accelerate the development of financial markets, and strengthen and improve foreign-exchange management," Zhou said in a New Year message on the PBOC’s website. Also today, Caixin magazine quoted Zhou as saying that while the yuan is near equilibrium, the currency’s trading band may widen to more than its current 0.5 percent on either side of the centralbank rate.

America’s Threat to Trans-Pacific Trade
Jagdish Bhagwati - Project-Syndicate.org
MUMBAI – As if undermining the World Trade Organization’s Doha Round of global free-trade talks was not bad enough (the last ministerial meeting in Geneva produced barely a squeak), the United States has compounded its folly by actively promoting the Trans-Pacific Partnership (TPP). President Barack Obama announced this with nine Asian countries during his recent trip to the region.
The TPP is being sold in the US to a compliant media and unsuspecting public as evidence of American leadership on trade. But the opposite is true, and it is important that those who care about the global trading system know what is happening. One hopes that this knowledge will trigger what I call the "Dracula effect": expose that which would prefer to remain hidden to sunlight and it will shrivel up and die.

Jim Rogers - CNBC 28 December 2011

The Obama Nation:
Even More Debt And Even More Store Closings
TheEconomiccollapseBlog.com
Well, it is time to raise the debt ceiling again. Right now we are about to hit the current limit of $15.194 trillion and the Obama administration is going to ask that it be raised by another 1.2 trillion dollars. Unfortunately, Congress has already promised not to stand in the way, and so soon the debt limit will be raised to a staggering $16.394 trillion. Considering how much debt we have already placed on the backs of future generations, what is another 1.2 trillion dollars? After all, if we are going to sell our children and our grandchildren into debt slavery, we might as well go all the way, right? Such is the thinking in "the Obama Nation". During "the Obama Nation", the federal government has already accumulated more debt than it did from the time that George Washington took office to the time that Bill Clinton took office. Of course the Bush administration was nearly as bad at piling up government debt. Between Bush and Obama (with a big helping hand from the Federal Reserve), they have done a pretty good job of wiping out the financial future of the United States. If there are future generations of Americans, they will look back and curse those that did this to them. It is absolutely immoral to steal trillions of dollars from future generations. Unfortunately, there are very, very few members of Congress that are even objecting to this madness.

Fannie Mae and Freddie Mac Saga Continues
Despite death knell business as usual
By Heide B. Malhotra - TheEpochTimes.com
The year 2011 will be remembered as a tough and challenging year for the two mortgage finance giants Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corp.). Both were deeply embroiled and commonly believed to be part of the problem that precipitated the mortgage crisis.
On Feb. 9, Rep. Scott Garrett, chairman of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises (GSEs), held a meeting titled GSE Reform, calling for an end to the taxpayer bailout of the two government-sponsored enterprises and launching a series of 2011 congressional hearings into the wheeling and dealing by the two giants.

U.S. Homes Lose $700 Billion in Value in 2011 --
and That's the Good News
By Sheryl Nance-Nash - DailyFinance.com
The year-end housing news is sobering -- U.S. homes are expected to lose more than $681 billion in value in 2011. But there's an upside -- that's 35% less than the $1.1 trillion lost in 2010, according to new research from Zillow (Z), a real estate information marketplace.
What else did the research show? Just nine out of 128 markets analyzed had gains in values in 2011. Bragging rights go to the New Orleans area, where the gains were greatest at $3.5 billion. Pittsburgh claimed the number two spot with a gain of $2.7 billion.

Some Housing Forecasts
by CalculatedRisk.com
One plus in 2011 was that residential investment made a small positive contribution to GDP growth for the first time since 2005 (mostly due to apartments). And construction employment probably added a few jobs in 2011, for the first time since 2006.
Now there is a growing consensus that new home sales and housing starts will increase in 2012. I think a small increase is likely, even with the large number of distressed homes, and I will be writing about the reasons soon.

Most Companies Don’t Plan to Hire in 2012
By Franklin Yu - Epoch Times Staff
NEW YORK—While the economy is slowly recovering, the employment picture isn’t likely to improve in 2012, according to surveys conducted by job search company CareerBuilder.
In a survey of more than 3,000 hiring managers and HR firms, 23 percent said that they plan to add full-time staff next year, which is slightly below the 24 percent who expressed the same sentiment last year. Seven percent said that they expect to trim staff, which remains the same as last year.
The rest of the firms say that they either do not know how they would proceed or intend to remain with the same headcount.

EEOC: High school diploma requirement
might violate Americans with Disabilities Act
By Dave Boyer-The Washington Times
Employers are facing more uncertainty in the wake of a letter from the Equal Employment Opportunity Commission warning them that requiring a high school diploma from a job applicant might violate the Americans with Disabilities Act.
The development also has some wondering if the agency’s advice will result in an educational backlash by creating less of an incentive for some high-school students to graduate.

Who Are the 6 Million?
By Derek Thompson - TheAtlantic.com
One of the unanswered mysteries about the economy today isn't just where the jobs are, but where the drop-outs are. Those "drop-outs" are the 6 million would-be workers who are not counted in the labor force because they've stopped actively seeking more work, even if they're very much hoping for more work.
If they counted toward unemployment, the official rate would be 11 percent rather than 8.6 percent. As the economy picks up, and these people re-join the job hunt, the unemployment rate will go up before it goes down.

U.S. consumer in the slow lane
By Stella Dawson
(Reuters) - It's up to the consumer to drive the U.S. economy and lift world growth in 2012, and the outlook is far from encouraging.
Over the past three and half years, growth in U.S. consumer spending has averaged a paltry 0.2 percent adjusted for inflation, the weakest in the post-World War II period, Morgan Stanley says.
While the employment picture is gradually brightening, wage growth is going in the opposite direction, keeping a lid on consumer behavior. Over the past year, pay for blue-collar workers adjusted for inflation fell 12 cents from the previous year, according to the Bureau of Labor Statistics. That was the steepest decline since the stagflationary days of 1980.

Online car-selling scam nets $4 million, prosecutors say
By Tiffany Hsu - LATimes.com
For more than three years, six foreign nationals ran an Internet vehicle-selling scam that bilked customers out of more than $4 million without delivering a single car, motor home or boat, according to a federal indictment out of Los Angeles this week.
The indictment charges six people from Germany, Russia, Romania and Latvia with conspiracy to commit bank and wire fraud and money laundering.

U.S. Net Exporter of Petroleum Products -
A Look at the Numbers
Written by James Hamilton - OilPrice.com
One big story of 2011 was the United States switched from being a net importer to a net exporter of petroleum products. Here are the details behind that development.
The graph below plots the difference between U.S. exports and imports of petroleum products. On average in 2008, we had been importing about 1.8 million barrels per day more than we exported. So far in the second half of 2011, the difference has swung to an average positive net export balance of 0.4 million barrels per day. The exports are coming in the form of diesel and gasoline that is being sold all over the world, with the top 10 buyers in terms of growth of demand for U.S. products being Mexico, Netherlands, Chile, Canada, Spain, Brazil, Guatemala, Turkey, Argentina, and France.

Incandescent bulbs dimming despite GOP efforts on Hill
By Sean Lengell-The Washington Times
New light-bulb efficiency standards kicked in Sunday, despite a last-minute Republican move that prohibits the federal government from spending money on enforcement.
And while some Republicans have championed the anti-enforcement effort as a temporary death-sentence reprieve of the traditional incandescent bulb, others say the move largely is symbolic, as manufacturers long ago had planned to adhere to the new regulations by Jan. 1.

Americans buy record numbers of guns for Christmas
Americans bought record numbers of guns last month amid an apparent surge in popularity for weapons as Christmas presents.
By Nick Allen, Los Angeles - Telegraph.co.uk
According to the FBI, over 1.5 million background checks on customers were requested by gun dealers to the National Instant Criminal Background Check System in December. Nearly 500,000 of those were in the six days before Christmas.
It was the highest number ever in a single month, surpassing the previous record set in November.
On Dec 23 alone there were 102,222 background checks, making it the second busiest single day for buying guns in history.

The Next Step
by Eric Peters - LewRockwell.com
Are we there yet?
No, but we are getting very close.
We are now at the point, I suspect, that our colonial ancestors were in the early 1770s. They were still British subjects, but had begun to question the relationship – the supposed right of the British sovereign to rule them. Within a very short time, they would reject the relationship in toto – onprinciple – and would become Americans.
I believe we are in roughly the same spot as those soon-to-be-Americans of the early 1770s.

Two Four Star Generals
Write New York Times Op-ed Against NDAA
and Indefinite Detention of Americans
The Intel Hub
Two retired four star Marine generals have written a stunning op-ed in the New York Times which demands that President Obama veto the National Defense Authorization Act, a bill that allows the government to use the military to indefinitely detain American citizens without due process.
Charles C. Krulak and Joseph P. Hoar, both 4 star Marine generals, published the piece on December 12. The op-ed starts with a direct demand that President Obama veto the NDAA bill in order to protect our country from the "false choice between our safety and ideals."
It then gets into one of the most blatant anti American treasonous provisions in the history of the United States.

Ringing in a Conservative Year
By George Will - PatriotPost.us
WASHINGTON -- Although they have become prone to apocalyptic forebodings about the fragility of the nation's institutions and traditions under the current president, conservatives should stride confidently into 2012. This is not because they are certain, or even likely, to defeat Barack Obama this year. Rather, it is because, if they emancipate themselves from their unconservative fixation on the presidency, they will see events unfolding in their favor. And when Congress is controlled by one party, as it might be a year from now, it can stymie an overreaching executive.

Presidential campaign
needs to get real on salvaging middle class
With the coming U.S. presidential election, 2012 offers voters, business leaders and politicians an opportunity for a joint debate over the fundamentals of capitalism in America.
By Michael Hiltzik - LATimes.com
Occupy Wall Street and its coast-to-coast spinoffs captured the headlines in 2011, but the economic debate it helped trigger should reverberate deep into 2012.
That's the debate over the future of the American middle class. Rarely has its economic plight been an explicit issue in a presidential election, but candidates on both sides of the partisan divide are poised to make it the centerpiece of their campaigns in the coming year.

Voters Want Growth, Not Income Redistribution
By Michael Barone - PatriotPost.us
"A 2008 election widely regarded as heralding a shift toward the more government-friendly public sentiment of the New Deal and Great Society eras seems to have yielded just the reverse."
So writes William Galston, Brookings Institution scholar and deputy domestic adviser in the Clinton White House, in the New Republic. Galston, one of the smartest political and policy analysts around, has strong evidence for this conclusion.
He cites a recent Gallup poll showing that while 82 percent of Americans think it's extremely or very important to "grow and expand the economy" and 70 percent say it's similarly important to "increase equality of opportunity for people to get ahead," only 46 percent say it's important to "reduce the income and wealth gap between the rich and the poor," and 54 percent say this is only somewhat or not important.

Door is open; all paths leading to Rome, next?
Some Anglicans apply to join the Catholic Church
By Michelle Boorstein - WashingtonPost.com
The Vatican is set to launch a structure Monday that will allow Anglican parishes in the United States — and their married priests — to join the Catholic Church in a small but symbolically potent effort to reunite Protestants and Catholics, who split almost 500 years ago.
More than 1,300 Anglicans, including 100 Anglican priests, have applied to be part of the new body, essentially a diocese. Among them are members of St. Luke’s in Bladensburg,which this summer became the first group in the country to convert to Catholicism.

Russia’s Inevitable Democratization
Sergei Guriev and Aleh Tsyvinski - Project-Syndicate.org
MOSCOW – Twenty years ago, Soviet President Mikhail Gorbachev resigned, the Soviet Union ended, and Russia began an imperfect transition to democratic capitalism – a transition that has proven to be far more difficult than expected. And yet the recent protests – somewhat similar to those that preceded the end of the Soviet Union – provide grounds for cautious optimism about the future.
So, what lessons can we draw from the successes and failures of Russia’s last two decades of post-Soviet transition? And what lies ahead?

The Shadow Superpower
Forget China: the $10 trillion global black market is the world's fastest growing economy -- and its future.
BY ROBERT NEUWIRTH - ForeignPolicy.com
With only a mobile phone and a promise of money from his uncle, David Obi did something the Nigerian government has been trying to do for decades: He figured out how to bring electricity to the masses in Africa's most populous country.
It wasn't a matter of technology. David is not an inventor or an engineer, and his insights into his country's electrical problems had nothing to do with fancy photovoltaics or turbines to harness the harmattan or any other alternative sources of energy. Instead, 7,000 miles from home, using a language he could hardly speak, he did what traders have always done: made a deal. He contracted with a Chinese firm near Guangzhou to produce small diesel-powered generators under his uncle's brand name, Aakoo, and shipped them home to Nigeria, where power is often scarce. David's deal, struck four years ago, was not massive -- but it made a solid profit and put him on a strong footing for success as a transnational merchant. Like almost all the transactions between Nigerian traders and Chinese manufacturers, it was also sub rosa: under the radar, outside of the view or control of government, part of the unheralded alternative economic universe of System D.

Japan hit by 7.0 earthquake
Telegraph.co.uk
A strong earthquake with a magnitude of 7.0 jolted eastern and northeastern Japan on Sunday, but there were no immediate reports of injuries or damages and no tsunami warning was issued.
The earthquake measured 4 in central Tokyo, Fukushima and their surrounding areas on the Japanese intensity scale, which measures ground motion, according to Japan Meteorological Agency, which uses a different measuring system than the U.S. Geological Survey.
A spokesman for Tokyo Electric Power said there were no reports of any abnormalities at the tsunami-crippled Fukushima Daiichi nuclear plan following the quake.
Some high-speed train services in northern Japan were suspended after the earthquake, but soon resumed operations, Kyodo news reported.

Air Force buys an Avenger,
its biggest and fastest armed drone
The new radar-evading aircraft, which cost the Air Force $15 million, has a maximum takeoff weight of 15,800 pounds and can fly at 460 mph. The drone, built near San Diego, is for testing purposes.
By W.J. Hennigan - LATimes.com
The Air Force has bought a new hunter-killer aircraft that is the fastest and largest armed drone in its fleet.
The Avenger, which cost the military $15 million, is the latest version of the Predator drones made by General Atomics Aeronautical Systems Inc., a San Diego-area company that also builds the robotic MQ-9 Reapers for the Air Force and CIA.
The new radar-evading aircraft, also known as the Predator C, is General Atomics' third version of these drones. The Air Force picked up only one of them, strictly for testing purposes.

North Korea's new year message declares era of prosperity
State greets 2012 with promises to defend Kim Jong-un 'unto death' and address food shortages, signalling economic focus
Associated Press in Pyongyang - Guardian.co.uk
North Korea has vowed to stage an all-out drive for prosperity and unite behind new leader Kim Jong-un, ushering in 2012 with promises to resolve food shortages, bolster its military and defend Kim Jong-il's young son "unto death".
The pledge in North Korea's annual new year message comes as the country enters a new era, with Kim Jong-un installed as supreme commander of the 1.2 million-strong military and ruling party leader following his father's death.

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